The Goods and Service Tax Council on Tuesday, July 12, decided to tax online gaming at 28%. The GST Council, agreed that there would be no distinction between games of skill and games of chance.
Former BhartPe founder Ashneer Grover slammed the Central government on Tuesday for imposing a 28 per cent Goods and Services Tax (GST) on online gaming. Grover said that the Centre’s decision will simply “murder” the $10 billion online gaming industry, and it is now time for startup founders to enter politics.
He criticised imposition of GST on online gaming despite the already existing 30 per cent tax on the money earned from such activities.
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“RIP – Real money gaming industry in India. If the govt is thinking people will put in Rs 100 to play on Rs 72 pot entry (28 per cent Gross GST); and if they win Rs 54 (after platform fees)- they will pay 30 per cent TDS on that – for which they will get free swimming pool in their living room come the first monsoon – not happening!” tweeted Grover.
The former Shark Tank India went on to say that being a part of the fantasy gaming industry was an enjoyable experience for him, but due to the Centre’s new rule, the gaming industry has now been severely impacted.
“It was good fun being part of the fantasy gaming industry – which stands murdered now. $10 Bn down the drain in this monsoon,” he added.
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Grover even suggested that it’s possibly the time for startup founders to join politics to represent industry concerns.
“Time for startups Founders to enter politics and be represented – or this is going to be spate industry after industry,” he added
Grover recently launched a fantasy gaming platform named Crickpe, where users are given a chance to create their own virtual team of the best real players, take part in contests, and win points for maintaining good performance in the game.
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28% GST on online gaming industry
The Goods and Service Tax Council on July 12 decided to tax online gaming, horse racing, and casinos at 28 percent, the highest slab. The GST Council, after its 50th meeting held in New Delhi, agreed that there would be no distinction between the games of skill and games of chance. The Council’s decision was also reiterated by Union Finance Minister Nirmala Sitharaman who said regardless of whether it’s games of skills or games of change, 28 per cent tax will be levied on both. The Ministry of Information and Technology will soon provide an inclusion or exclusion list of games, she added.
However, the effective date for levying the 28 percent GST levy on online gaming will be notified after amendments to GST law.
Setback for online gaming industry
The Centre’s decision to impose 28 per cent GST on the online gaming activities would prove to be a major blow for the online gaming industry, which recently surged in popularity and attracted large foreign investment. The new tax policy is likely to slow down the revenue generated by the e-gaming industry.
The stakeholders in the online gaming industry claim that the high taxation would adversely impact the capability of the companies to develop new games and upgrade technology while reducing their competitiveness.
