India deals a 28% tax blow to online gaming firms
India unveiled a significant tax increase on turnovers of online gaming companies on Tuesday evening in a major blow to the fast-growing industry that was quick to label the move as “catastrophic” and “unconstitutional.”
The Goods and Services Tax Council, which comprises top federal and state finance ministers, said it had agreed to levy a 28% indirect tax on online gaming, casinos and horse racing. The council said there should be no distinction between “game of skill” and “game of chance,” closing a loophole that has allowed fantasy sports companies to justify their offerings as skill-based.
Roland Landers, chief executive of All India Gaming Federation, a tradebody that represents many players including Mobile Premier League, Gameskraft, Paytm First Games, Zupee, Nazara, and Rush, said that the GST Council’s decision is “unconstitutional, irrational, and egregious.”
“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,” Landers said in a statement.
Online gaming is one of the fastest growing consumer internet businesses in India. Startups including Dream Sports, valued at over $8 billion, have raised billions as a generation of internet users forms habit of making bets on real-world sporting events.
<p lang=«en» dir=«ltr» xml:lang=«en»>Online gaming is perhaps the only segment of the internet economy that has multiple highly profitable companiesDream11 had a net profit of Rs 150 cr on revenues of Rs 3,841 crore in FY22
Gameskraft, which runs RummyCulture, had a profit of Rs 930 cr on revenue of Rs 2153 cr https://t.co/6flycwF3bd
— Madhav (thearcweb.com – sign up!) (@madhavchanchani) July 11,
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