![]() Gambling worry as India firms bet big on online games Driven by easy access to affordable smart phones and cheap mobile data, the sector attracted $2.5bn in foreign direct investment, including from the likes of Tiger Global. The online gaming industry has seen a massive boom in India over the last five years, with an annual compounded growth rate of 28-30%. It will shake investor confidence and lead to a funding winter," Mr Bhattacharjee added. ![]() "The move has completely blindsided the industry. This will "disincentivise players and is totally inconsistent with global standards" where VAT or GST is levied at a median rate, and that too only on platform fees or commissions, said Sudipta Bhattacharjee, partner at corporate law firm Khaitan & Co. In effect, for every $100 (£76.8) spent by a player, there will be a "sunk cost" of $28 towards GST, in addition to a $5-15 charge by the gaming platform and a 30% tax deducted at source (TDS) on any winnings drawn. But the imposition of a 28% GST on the full face value of a gaming transaction will mean the entire amount collected from players will now come under the ambit of taxation.Īccording to industry estimates, total tax collection on player winnings will go beyond 50%, including GST, platform commissions and income taxes when the new law is implemented. The country's 900+ gaming start-ups had been paying a small tax on the fee they charged for offering games. Shares of Indian online gaming platforms and casinos have crashed following the GST (Goods and Services Tax) Council's decision. ![]() The Indian government's decision to impose a 28% tax on online gaming poses an "existential threat" to the booming industry and could spell its death knell, say experts. The tax is a "step in the right direction", says Siddhartha Iyer, a Supreme Court lawyer who has been fighting to ban online gaming ![]()
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