High GST on gaming wiped out margins

A year after the government notified a higher 28% goods and services tax (GST) for online gaming companies, Head Digital Works founder and CEO Deepak Gullapalli said the move took away 20-25% margins, pushing the company into losses.

Before October last year, online gaming firms were paying 18% GST on the platform fee, which is the commission they charge from the participants entering a game. The GST Council revised the rate on online gaming to 28% on full face value or deposits made by the participants to play games, effective October 1, 2023.