The online gaming industry has been dealt a significant blow with the GST Council’s recent unveiling of a new tax structure. The structure imposes a 28% tax on turnover which has caused concern among industry stakeholders. Many fear that this move may harm the growing market and have voiced their criticism since the announcement earlier this month.
Online Gaming Industry Unites to Voice Concerns
Many experts in the gaming industry are concerned about the government’s recent decision, which could have significant consequences. It may impede business growth and restrict gaming companies’ ability to invest in new games. Many entrepreneurs and stakeholders have voiced their disapproval of this change. Anupam Mittal, the founder of Shaadi.com and a judge on Shark Tank India, spoke out against the move, advising entrepreneurs to shift their focus from gaming companies and instead “start building rockets.”
Ashneer Grover, the founder of BharatPe, recently launched his own fantasy gaming platform, Crickpe. He shares the concern that the tax hike may cause the industry to lose billions of dollars. Grover suggests that startup founders should consider entering politics to ensure better representation and safeguard the industry’s interests.
Following widespread criticism, Rajeev Chandrasekhar, the Minister of State for Electronics and Information Technology (MeitY), has taken a proactive approach. He plans to approach the GST Council and request a reconsideration of the newly proposed regulatory framework.
The All India Gaming Federation (AIGF), which represents well-known gaming companies such as Nazara, GamesKraft, Zupee, and Winzo, has strongly opposed a recent decision. The federation deems the decision “unconstitutional, irrational, and egregious” as it fails to distinguish online skill gaming from gambling activities.
AIGF CEO Roland Landers stated that “The decision ignores over 60 years of settled legal jurisprudence and lumps online skill gaming with gambling activities. This decision will wipe out the entire Indian gaming industry and lead to lakhs of job losses and the only people benefitting from this will be anti-national illegal offshore platforms”.
