Tag: gaming

28% GST impact: Mobile Premier League lays off 350 employees

Catz in his call, did not talk about how the business will be brought to a halt. (Representative Image: Tarik Haiga via Unsplash)

The announcement of higher tax rates for online gaming had the industry anticipating a significant financial burden. This move has already led to layoffs, starting with MPL.

Explained: What are the GST Council’s tax recommendations for online gaming?

In the letter, Chandra alleged that hasty steps are being taken in the merger process and the SEBI investigations do not bother him as much as the timing of the new notice. (Image via Twitter)

The 51st GST Council meeting on August 2 approved 28% GST on online gaming on full face value, clearing doubts and confusion surrounding the matter.

GST Council clears the way for taxing offshore gaming companies; experts divided on its impact

For quite some time now, companies like 1XBet, DafaBet, Fairplay, Parimatch, and Betway have been ramping up their advertising efforts in India, coinciding with the action-packed events like Indian Premier League cricket season, World Cup and others. In fact, they have been using the GST chaos for moment marketing purposes as well. Platforms like Fairplay have been using influencers to promote features such as '24X7 winning withdrawal, no GST, and referral code bonuses’.

The council recommended inserting a specific provision in the IGST Act, 2017, to provide for liability to pay GST on the supply of online money gaming by a supplier located outside India.

GST Council decision on online gaming: Industry voices concerns and hopes for future review

The Supreme Court recently stayed the Karnataka High Court's judgment that had quashed the GST department's show-cause notice to Gameskraft in May 2023. (Representative image by Michał Parzuchowski via Unsplash)

While re-strategising business models might be an option for the larger players, for the smaller online gaming enterprises, the weight of taxation could prove to be insurmountable as per stakeholders.

MSMEs will no longer be able to survive in the face of the increased tax liability of 400-500 percent: AIGF

In the letter, Chandra alleged that hasty steps are being taken in the merger process and the SEBI investigations do not bother him as much as the timing of the new notice. (Image via Twitter)

E-Gaming Federation (EGF) and FIFS (Federation of Indian Fantasy Sports) said the burdensome increase in GST will set the Indian online gaming industry back several years.

RMG platform Quizy, shuts down citing tax burden as the reason

Sugar Box had been reassuring its employees for months about receiving funds from ZEE, prompting them to stay on despite salary delays. (Representational image by Tim Mossholder via Unsplash)

The real money gaming platform shuts down citing tax burden reasons amid GST-related challenges. Founder Sachin Yadav announces the closure on LinkedIn.

India’s proposed 28% GST on online gaming among the highest in the world

Moving on from taxes and revenues, the report also said that India’s online gamers are expected to grow at a CAGR of 5 percent and reach 53.8 crore by FY28. (Representational image via Unsplash)

Most countries tax online gaming below 20 percent; the proposed rate may push players to the illegal market, says a report. The UK, for instance, follows a rake fee based model taxed at 21 percent. Pennsylvania, US, also follows the same model and the taxes are 14 percent on online poker and 15 percent on fantasy games. Belgium, Denmark, Sweden and Germany also follow the rake fee based model and are taxed between 11 percent and 19 percent. Countries like South Africa, Singapore and Australia that levy taxes on deposits have tax rates between 7 percent and 15 percent. All less than India.