Abstract

This article analyses the e-gaming taxation regime of India and points out a few fundamental flaws with the same. It recognizes the government’s wish to increase the impetus for the growth of the industry but argues that due to the taxation regime set up by the government itself which imposes huge amounts of tax burden on the industry, the said objective becomes impractical to materialize. Firstly, it introduces the problem at hand and then builds up to criticize the immense taxation burden that could be induced by the complete implementation of the GST council which states to tax the games based on skill and chance in the same bracket and points out decades of jurisprudence in contravention of the said recommendation of the council. Secondly, it starts to examine the newly introduced provisions of the Income Tax Act which are sections 115BBJ and section 194BA, and critiques the functional appropriateness of the said provisions, it criticizes section 194BA on the grounds of ambiguity in determining net winnings liable to be taxed from the financial year, thirdly it finds flaws in section 115BBJ on the grounds of its possible faulty application while calculating the gross prize money The article provides an instance of such over-taxations by giving the example of the DeltaCorp case and then concludes by asserting that due to such huge taxation pressure, the e-gaming industry will not be able to survive properly let alone grow hence the taxation regime being self-defeatist in nature and makes a case for decreased taxation pressure on the industry while simultaneously promoting dialogue as a possible solution for the problem.

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