Ashneer Grover, a prominent figure in the Indian tech landscape and co-founder of BharatPe, has fiercely criticized the recent decision of the GST Council to impose a heavy 28% Goods and Services Tax (GST) on online gaming. This decision holds significant consequences for various gaming companies, such as Dream11, MPL, Gameskraft, and Games 24×7.
In a fervent tweet, Grover lambasted the government’s move to levy the highest GST rate on online games, labeling it as a potential obliteration of India’s thriving gaming sector. He argued that this abrupt imposition necessitates tech startup founders to delve into politics, underlining the urgency for their voices to find resonance. Grover’s apprehensions are tightly intertwined with his own venture, Crickpe, a mobile game centered around fantasy cricket. Crickpe allows users to not only indulge in the game but also to earn money through paid leagues and victorious cash pools.
With unmistakable frustration, Grover tweeted, “Farewell – Genuine currency gaming industry in India. If the government believes that people will stake Rs 100 to participate in a Rs 72 prize pool contest (bearing 28% Gross GST), and if they pocket Rs 54 (after accounting for platform fees), they will then be subjected to a 30% TDS on that amount – an imposition that supposedly grants them an indoor swimming pool during the first monsoon – an absurd notion!
His tweet goes on to assert, “It was an enjoyable journey being part of the fantasy gaming industry, which now stands vanquished. $10 Billion squandered in this season of downpours. It’s time for startup pioneers to step into the realm of politics and secure representation – lest we witness one industry’s downfall after another.”
Grover’s pointed remarks were a direct response to the GST Council’s decision to enforce a 28% tax on online gaming. This elevated tax rate will be applicable to the entire value of transactions within the sphere of online gaming. This move will inevitably impact multiple gaming entities, including Dream11, MPL, Gameskraft, and Games 24×7.
Echoing Grover’s sentiments, India’s most seasoned and extensive online gaming consortium, the All India Gaming Federation, along with the E-Gaming Federation and the Federation of Indian Fantasy Sports (FIFS), have expressed their displeasure with the council’s decision to raise the GST on online skill games from 18% to 28%.
In a collective statement, these three industry bodies have expressed their concern about certain media reports hinting at the imposition of taxes on the overall prize pool (inclusive of pooled prize money and platform commissions), rather than solely on the Gross Gaming Revenue (GGR). They opine that if the latter scenario unfolds, it could spell doom for the online skill gaming sector in India.
Roland Lander, CEO of the All India Gaming Federation, articulated in a statement that the combination of heightened tax rates and the imposition of taxes on the entire entry fee (as opposed to GGR) would prove “catastrophic for the industry, stifling its potential right at its inception.