Investors in online gaming sector seek meeting with PM Modi on 28% GST levy

livemint.com:

Narendra Modi regarding the recent decision by the GST Council to impose Goods and Services Tax on online gaming operators by changing the methodology of determination of “value of supply" from the decade-old practice of charging Service Tax/GST on the operator’s gaming revenue to a levy of GST on the “full value".  In the letter, the investors said that the decision has ‘unintended consequences’ of equating the constitutionally protected legitimate online skill gaming industry with gambling, betting, and other “games of chance".

“We invested in this sector to make India the gaming capital of the world, which would help in generating, among other things, high-skilled jobs, billions in foreign capital and make the country a net exporter of innovation in gaming and allied areas such as animation, artificial intelligence, and visual effects," the letter read.  They also expressed their happiness over the amendment to the Income Tax Act and the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021 (IT Rules), where both pieces of legislation have drawn a clear distinction between legitimate online gaming activities, betting, gambling, and “games of chance" activities, and also brought in clarity for the sector.  The investors asserted that the skill-based real money gaming sector also supports a significant proportion of the game developer community across the country, who are pivotal to PM Modi’s vision of making India a gaming superpower.  “The current GST proposal will set up the most onerous tax regime for the gaming sector globally, which will lead to a potential write-off of the $2.5 Billion capital invested in this sector which will adversely impact prospective investments to the