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The online gaming industry has suggested a new formula to the government for levy of 28 per cent GST on its activities, mainly seen as a measure to protect its interests, as per reports.

On July 11, the GST Council, headed by Finance Minister Nirmala Sitharaman, had decided to levy the highest slab of 28 per cent GST on the full value of money paid by users to play skill-based games, without any differentiation between games of skill and chance.

As of now, there is an 18 per cent GST levy on gaming platforms.

The decision has come as a rude shock for the gaming industry, which, in an open letter to the government, has urged it to reconsider the decision.

Now, with the GST council scheduled to meet virtually on August 2 to take a call on the mechanism for implementing the July 11 decision, the industry is learnt to have suggested to the government that 28 per cent GST should be levied on the sum total of net deposits at the company level, rather than on gross deposits, reports said.

Industry sources say that 28 per cent GST levy on gross deposits could break the gaming industry's back and seriously impact the real money gaming formats like rummy and poker, as it would result in a major reduction of overall prize money.