Online Gaming: MoS Rajeev Chandrasekhar may have some ‘soothing words’ for the online gaming industry – Times of India
India’s online gaming industry reeling under the shock of 28% GST proposed by the GST Council last week, may have some glimmer of hope. The Minister of State for Electronics & Information Technology (MeitY) Rajeev Chandrasekhar has said that he will “request the GST council for consideration on the new regulatory framework”. “We will go back to the GST Council and request their consideration on the facts of the new regulatory framework,” Chandrasekhar said while speaking at an event.
On July 11, the GST Council decided to impose a 28% GST on full face value for online gaming companies. The GST Council’s decision stipulates that all online gaming will attract the top GST rate, whether based on skill or chance, sparking widespread condemnation by the industry.
In an anxious huddle
The online gaming industry has been in an anxious huddle ever since the decision of the GST Council has been announced. In a letter to the Ministry of Electronics and Information Technology (MeitY), the industry appealed to impose this tax on gross revenues only.
Around 130 online gaming companies and industry associations, including Mobile Premier League (MPL), Nazara Technologies, Gameskraft Technologies and Winzo Games, have appealed to the GST Council to reverse the decision, saying that the move threatens the industry’s very survival. Also, that the decision would only benefit illegal platforms. They also further expressed fears that the decision may lead to thousands of job cuts in the online gaming industry.
The Internet and Mobile Association of India (IAMAI) expressed concern over the decision to levy 28% GST on “the full face value of the consideration instead of just the platform fee” and the impact this will have on India’s digital economy and the online gaming industry.
In an open letter, the companies noted that the online skill gaming sector in India has a $20-billion enterprise valuation and generates annual revenue of $2.5 billion. It is expected to grow at a 30% compounded annual growth rate to reach annual revenue of $5 billion by 2025, they added.
“The proposal to charge GST on full deposit value will reverse the growth trajectory of the industry. This would potentially have devastating implications (including shutdown of businesses) for MSMEs (micro, small and medium enterprises) and startups that may not have the capital reserves to withstand such a sharp tax increase,” the letter read.
On July 11, the GST Council decided to impose a 28% GST on full face value for online gaming companies. The GST Council’s decision stipulates that all online gaming will attract the top GST rate, whether based on skill or chance, sparking widespread condemnation by the industry.
In an anxious huddle
The online gaming industry has been in an anxious huddle ever since the decision of the GST Council has been announced. In a letter to the Ministry of Electronics and Information Technology (MeitY), the industry appealed to impose this tax on gross revenues only.
Around 130 online gaming companies and industry associations, including Mobile Premier League (MPL), Nazara Technologies, Gameskraft Technologies and Winzo Games, have appealed to the GST Council to reverse the decision, saying that the move threatens the industry’s very survival. Also, that the decision would only benefit illegal platforms. They also further expressed fears that the decision may lead to thousands of job cuts in the online gaming industry.
The Internet and Mobile Association of India (IAMAI) expressed concern over the decision to levy 28% GST on “the full face value of the consideration instead of just the platform fee” and the impact this will have on India’s digital economy and the online gaming industry.
In an open letter, the companies noted that the online skill gaming sector in India has a $20-billion enterprise valuation and generates annual revenue of $2.5 billion. It is expected to grow at a 30% compounded annual growth rate to reach annual revenue of $5 billion by 2025, they added.
“The proposal to charge GST on full deposit value will reverse the growth trajectory of the industry. This would potentially have devastating implications (including shutdown of businesses) for MSMEs (micro, small and medium enterprises) and startups that may not have the capital reserves to withstand such a sharp tax increase,” the letter read.
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