The Taiwan-based animation company specializes in game and character animation across human, mechanical, and animal characters, which Capcom wants to boost further. The main purpose of the acquisition is to enhance the studio’s technological and game developmental capabilities. To acquire the studio, Capcom had to pay $ 27,265 during the share purchase to make it a subsidiary company.

The acquiring company aims to achieve a goal of 100 units in annual sales and long-term management so that it wouldn’t be a lost deal. Since Minimum Studios had already worked on Resident Evil titles, they will be developing the characters for the upcoming game in the series Resident Evil 7’s. 

The director of the game is Koshi Nakanishi, who has not yet revealed anything about the content of the same. However, it is speculated and anticipated that this will be much bigger and better than Resident Evil Village.

Capcom only has two-thirds of the shares of Minimum Studios, and they have made it clear that they will continue to explore the acquisition for better gaming development. Currently, the company operates from Osaka and has offices in Japan, East Asia, North America, and Europe. Apart from Minimum Studios, the company also has other subsidiaries for game development, like Blue Harvest, K2, and 3D/ 2D CG studio Swordcanes.

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However, the online gaming industry and casinos predicted a revision of the 28% GST rate but did not discuss it on that date. She announced many agendas, and legal advisory still remained due to lack of time. Also, she told reporters that the next meeting will be on a post-budget. 

The union finance ministers are also expected to seek input from state finance ministers on issues such as fertilizer tax exemption, pre-deposit of appeal under the GST tribunal, and others. However, she said there will be another meeting, hopefully in mid- or end-August.  

What Is The Rule Of GST On Real Money Gaming? 

The GST meeting last year implemented 28% on online real-money gaming and casinos, which is equal to the wager amount. However, this decision faced strong criticism from stakeholders in the gaming industry, including investors, developers, and gaming representatives. 

The communication was in writing, and they requested reconsideration of the tax rate’s implementation. They explained that the 50th GST council meeting, held on 11 July 2023, implemented the 28% GST on the online gaming industry, which came into force by October 1. 

With the new guidelines, a flat 28% GST is levied on the total value of bets placed on online games and casinos. The values are said to be applied to games of skill or chance. According to previous data, a total of 18% GST was levied on the specific amount that the platforms charged for skill-based games. 

Several online gaming startups implemented a new tax structure. These include Gameskraft and Dela Corp, where notices regarding tax payments were made in the amount of Rs. 1.12 lakh crore in GST. 

Hopefully, the next meeting will feature a discussion on the provisions of GST law that may require any amendments, and the next can be passed along with the Finance Act. Also, big ban reforms may be taken later, and GST demands on Retrospective claims may be discussed for better GST compliance.

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The post GST Council Meeting Concludes With No Relief For Online Gaming Industry first appeared on The Gaming Newz.

The Economic Times reported that the GST council has mooted the amendments to quash the retrospective tax demands from online gaming companies. As the report mentions, unclarity in the tax notices, which led to lower tax payments, can be quashed. In simple terms, a retrospective tax means that the Government can impose/collect taxes on an organisation’s transaction or a deal.

Official Reports On The Retro Tax Demands

There is going to be a council meeting on June 22nd that could lead to a call on recommendations. In the meeting, the law committee could introduce a new section 11A in the legislation as per the CGST Act, 2017. 

This proposal of amendment could focus on the government not recovering GST that’s short-levied or not-levied as a result of general practice. It is expected to allow the authorities to quash the tax demands from gaming companies raised with retrospective effects. However, companies won’t be able to claim any refunds on their overpaid GST.

In the financial year 2023-2024, the DGGI (Directorate General of Goods and Services Tax Intelligence) identified 6,323 tax evasion cases. All those tax evasion cases totaled an amount of Rs. 1.98 Lakh Crores. From which the online gaming sector had the most tax evasion notices, totaling over Rs. 1 Lakh Crore.

People familiar with the development said that low taxes were paid due to a lack of clarity and wrong interpretation of the law. In these cases, as per the recommendations, the tax notices will most likely be quashed. More information is yet to be announced by the authorities.

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The GST Council officially announced that the 53rd meeting of the GST council is scheduled to take place on June 22, 2024, in New Delhi. The previous meeting was conducted on October 7, 2023, chaired by the Union Finance Minister, Nirmala Sitharaman. 

The GST council will be holding the meeting for the first time since the NDA alliance returned to power for the third consecutive year. Nirmala Sitharaman continues in her role as Finance Minister for the second time since 2019. 

As per reports, she is preparing to present the final budget for FY25, which will outline the government’s priorities and direction for the coming years. The GST council will see new representatives from state governments following the recent election results from: Andhra Pradesh, Sikkim, Odisha, and Arunachal Pradesh. 

The 53rd meeting of the council is scheduled to take place before the first Parliamentary session of the 18th Lok Sabha, which commences on June 24. The specific agenda for the meeting has not been finalized yet and will be clarified in the upcoming days. Previously, the GST Council was slated to review the new tax regime for the real money gaming sector, effective from October 1, 2023. 

However, this review was postponed due to the general elections held in April and May 2024. The gaming industry, facing challenges from high taxes rates, is hopeful for a favorable outcome from the upcoming Council meeting.

A government official indicated in April that the council is likely to maintain the existing 28% GST rate on the face value of online gaming bets. Additionally, the council is expected to discuss the issue of tax dues, with a final hearing in July 2024.

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The post GST Council to Meet on June 22 To Discuss Taxation Issues   first appeared on The Gaming Newz.

According to a recent industry report, there were around 425 Million gamers in the Indian Gaming community in FY 2023. The report also shows a YOY growth of 4.5%. Moreover, the segment has attracted investments of close to $1.9 Billion between the years 2020 and 2023. 

Another report says that the Indian gaming segment can reach $4.6 Billion by the year 2025, with a compound annual growth of 21%. As internet usage gets boosted in India, 548 Million smartphone users and approx. 430 Million unique mobile gaming app downloads took place in the year 2023.

The RMG (Real Money Gaming) Segment 

Real Money gaming holds the high ground in India, with a market share of 82.8% in FY23. this shows that Indian developers and publishers are focused on RMG more than other segments of gaming sectors. 

Even the rules and regulations are revolving around the concerns related to the RMG segment. The government and law enforcement agencies are also focusing on curbing illegal gambling/betting to promote safe RMG online games.

More On The Major Lobby Groups

There are four major lobby groups that represent the majority of Indian online gaming companies. The lobby groups are the E-Gaming Federation (EGF), the Internet and Mobile Association of India (IAMAI), the Federation of Indian Fantasy Sports (FIFS), and the All India Gaming Federation (AIGF).

As mentioned before, their focus is also revolving around legitimising RMG games and curbing the usage of illegal gambling and betting. The theme has now become the industry standard to protect consumer interests and create a healthy gaming environment for Indian gamers.

However, the Indian government recognizes that non-RMG games should also be promoted. In the recent consultation paper, the government sought industry reviews on the matter while promoting Indian developers and independent publishers.

The Indian government has now emphasised the fact that popular online games developed in foreign countries are better than India’s. This is due to the lack of expertise and knowledge of the market. So, now, after days and months of discussion, the dynamics are shifting from illegal gambling vs. legal RMG games towards potent ways for revenue generation from the online gaming industry.

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According to officials’ statements, the limit on time and money spent on these gaming platforms is done to curb its addiction among children and youth. During a meeting of the Ministry of Electronics and Information Technology, a consensus on this method, which was also adopted by China, surfaced. During this meeting, various aspects of the latest information technology rules 2021 were discussed.

An IT Ministry said that imposing limits on time and money spent is a better alternative to certifying games as permissible or non-permissible through SRO.

Market Estimates And Official Statements On Imposing Limits

Despite all the claims, there is a high possibility all the (Gaming) SROs will be formed under industry influence. An official mentioned that this won’t be in favor of policies as many youngsters are involved in the matter. According to a market estimate, in 2023, around 9.5 billion users downloaded gaming apps on their mobile devices in India.

As per the estimates, India has the largest gaming market worldwide, with almost 570 million active gamers. A joint report from Winzo, a non-profit firm Interactive Entertainment and Innovation Council (IEIC), was released earlier in March. The report mentioned that about a quarter of these active gamers (roughly 140 million users) have paid for the games or have invested some money in them.

If this rule is successfully imposed on gaming companies, they will have to adhere to the limits on time and money spent by youngsters.

More On The New Initiative 

Another official stated in his statement that the new mechanism to keep an eye on time limits and money spent should be easy to implement. He also mentioned that they are trying to work with the industry in the matter and working to find the best possible solution.

When the gaming industry was notified about this new rule in April 2023, the IT Ministry gave them a time period of 90 days to form an SRO. The ministry stated that if the gaming companies fail to do so, the government would further form its own SRO regulating this matter.

Although there were three proposals in favor of the government creating its own SRO, it didn’t go with it. Afterward, IT Ministry officials said that all three proposals were industry-backed and that they had to reject them.

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EGF plans to enhance its player protection, transparency, and responsibility strategy in the online gaming industry. Ankur’s appointment is a huge part of this tactic, demanding him work closely on legal matters and support the growth and development of India’s online gaming sector.

Official Statements On Ankur Gupta’s Appointment

Anurag Saxena, CEO of EGF, mentioned in his statement that they are thrilled to have Ankur on their team. He also stated that Ankur’s expertise in law and experience in advising Singapore’s government can greatly benefit India’s tech ecosystem. According to Anurag, Ankur’s leadership will prove to be invaluable for the Indian online gaming landscape.

Ankur expressed his enthusiasm about his appointment and role at EGF. He stated that he is excited to join the EGF and contribute to its departments, such as legal research, stakeholder engagement, and policy positioning.

Gupta also mentioned that he looks forward to working with some of the world’s most talented teams at EGF. This will help him strengthen his overall strategy in achieving EGF’s legal goals. In the end, Gupta emphasized his approach with a powerful quote, “Sometimes you win, and sometimes you learn.” mentioning this, Ankur stated that he hopes to apply this philosophy in his work at EGF as well.

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The Chinese embassy has repeated China’s firm stance against any type of Gambling Suspects. They’ve clearly emphasised that online gambling, citizens involved in gambling abroad or operating casinos overseas are completely prohibited under their laws. 

This recent engagement is similar to an operation conducted back on February 22, which led to the repatriation of over 40 Chinese nationals engaged in offshore gambling activities. Since 2023, the Philippines Presidential Anti-Organized Crime Commission has led several joint law enforcement operations with other agencies.

More On Telecom And Gambling Suspects

As there has been a rising concern over telecom fraud, false investments, and fake financial management cases in China since 2023, collaborative efforts between China and Southeast Asian countries have intensified. To safeguard the public from fraudulent activities in China, special joint operations have also been initiated.

According to a report, alongside China and the Philippines’ collaboration, another alliance has been formed between Laos, China, Thailand, and Myanmar to combat telecommunications fraud across borders.

Through Practical law enforcement cooperation, China plans to support the Philippines aiming to resolve these issues OF Gambling Suspects as soon as possible. Overall, ensuring public safety, cooperation between China and Philippines has shown an important progress in international law enforcement collaboration.

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Online gambling and casinos are the fastest-growing betting platforms, and millions worldwide use them to explore thrilling actions and profitable outcomes. The latest data reveals that online gaming and casino retrospective GST cases listed in SC today involve payments of thousands of crores calculated at 28 percent of the bet’s face value.
This official notification was taken to the Supreme Court, which listed GamesKraft and a batch of matters today before the 3 judges’ bench headed by DY Chandrachud, judge of the Chief Justice of India. Here, the hearing on Friday finalises that the batch of cases will be listed after the summer vacation in July 2024, when the court opens. 
Further, tomorrow’s listing is to take directions from the bench on the procedural aspects, where matters may be heard for a few minutes. The Supreme Court currently holds a cluster of 30 petitions from online real-money gaming firms. 
In April, it transferred to itself 27 writ petitions where the decision is pending across 9 different state high courts. Also, they are challenging the levy of 28% GST on all forms of online real-money gaming with a retrospective effect.

What Decisions Were Made By The Supreme Court Of India? 

The same announcement was made in December 2023, when the apex court declined to halt these notices but agreed to hear the plea. These gaming firms face 71 show-cause notices for GST evasion of Rs 1.12 lakh crore in 2022-23, excluding interest and penalties.  

Here, the penalty of 100% of tax demand, which could surpass 2.4 crore, including interest, would be charged under Section 74. Moreover, earlier data reveals that on October 1, 2023, a 28 percent GST was levied on the full face value of online gaming bets by the GST Council, where review was taken after 6 months.  

The Supreme Court also sought a response from the Director General of goods and services tax, where petitioners were Dream 11, Games 24/7, and Head Digital Work. It is said that in September last year, a supreme court imposed a stay of operations of Karnataka high court order where GST filed officers notices Rs. 1.12 lakh crore to online gaming companies for alleged tax evasions and facing legal challenges.

Earlier, the Karnataka high court squashed a GST notification of Rs 21,000 crore on hold due to online, electronic, or digital rummy played on Gameskraft not being taxable as a betting or gambling industry. 

After meeting in July and August 2023, it was recommended that online gambling and casinos, along with horse racing, be charged 28% on full face value without differentiating games of skills from games of chance. This became effective in October 2023, and currently, the prospective application is not being challenged. 

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The GST council will hold a meeting in June after the new government comes in and will review the taxation issues of the gaming industry. In the past years, the industry has witnessed a surge in its revenue as several people are attracted towards online gaming. The GST charges on the total face value of the companies have been set to 28 per cent, and there are no chances of making any changes to the same.

All the prominent online gaming companies have to continue to pay 28 per cent GST on their revenue. This is because the government has seen an increase in revenue by 5-6 times in the past few months. As per the reports, the GST was calculated at Rs. 200 crore per month, which has now increased to Rs. 1,100 crore per month.

Although the gaming companies and the industry representatives have requested the council to reconsider the existing charges, there has not been any positive response from the other end. After the meeting in June, the final review and decision will be made, and the companies will have to be bonded by the same. The future and fate of online gaming in India depends upon the upcoming GST council meeting, and hence, it is the recent interest of game enthusiasts and representatives alike.

The post Gaming Companies Witness Surge In Revenue With No Relaxation From Government In GST first appeared on The Gaming Newz.