In a recent twist of events, the GST Council’s decision to impose a hefty 28% GST on online gaming, horse racing, and casinos has sent shockwaves through India’s gaming industry. As the dust settles, companies are sounding the alarm, predicting the future of country’s thriving online gaming sector.
A Death Blow to Legitimate Gaming Industry
The implications are dire, as legitimate online gaming businesses fear being pushed to the brink of collapse. Bhavin Pandya, Co-founder and Co-CEO of Games24x7, a prominent fantasy sports platform, warns that the levy on online gaming will render the industry unviable.
Players may flock to offshore and illegal platforms that evade taxes, causing a loss of revenue for the nation and, more gravely, thousands losing their livelihoods.
From a Dream to a Nightmare
The situation worsens as the once-thriving industry grapples with a tax burden. The GST Council’s decision translates to a staggering increase from 1.8 rupees per 100 rupees spent on a game to 28 rupees per 100. Not only will this discourage players from engaging, but it also burdens gaming professionals who consider this their livelihood. The vision of fostering a digital progressive gaming ecosystem now hangs in the balance.
A Self-Goal of The Council
As industry players unite in voicing their concerns, Amrit Kiran Singh, Chief Strategy Advisor to the Founders of Gameskraft, laments the move as a ‘self-goal’ by the GST Council, effectively delivering a fatal blow to India’s Skilled Online Games industry. He points out that the tax hike will favour foreign gaming companies, leading to the exodus of domestic gaming companies overseas.
A War for Survival
In a borderless industry, over-taxation in India threatens to extinguish the domestic gaming market. Market leaders like the USA and China, with 23% and 25% market shares, respectively, stand to gain from India’s misfortune. High taxes could harm India’s startups, making it tough for successful homegrown companies to survive.
While the council argues for parity between the ‘game of skill and game of chance,’ the ramifications may extend far beyond their expectations.
The Path Forward: A Gamble for India’s Digital Future
As the debate intensifies, the gaming industry stands at a crucial crossroads. The once-promising landscape now faces uncertainty, with the potential to either thrive or falter. It’s a gamble with India’s digital future, where industry players, regulators, and policymakers must take some action to hold the industry for good. Direct a path that balances revenue needs, sustains businesses, and fosters a vibrant gaming ecosystem.