Online gaming investors say 28% GST will make business ‘unviable’
online gaming sector are planning to come together and write to the government, raising concerns about the decision to levy 28% GST on the full face value of the bets for real money online games, people aware of the discussions said. These investors are likely to caution the government that this steep tax could make the industry unviable, while disproportionately hurting small startups, one of the people briefed on the matter told ET.
They had previously demanded that GST be levied on the gross gaming revenue, which is the platform fee that the companies collect for facilitating the games, and not on the full face value, or the contest entry amount. Investors like Tiger Global, Alpha Wave Global, DST Global, TPG, Matrix Partners India and Steadview Capital hold stakes in Indian real-money gaming startups including Dream11, Games 24x7, Mobile Premier League (MPL) and Zupee.Also read | Regulatory tech companies fear 25% knock-on hit from gaming GST The Indian gaming sector has raised $2.8 billion from domestic and global investors in the past five years, according to data from Invest India, the national investment promotion agency.
Funding has increased nearly fivefold from 2019, show the data. “Investors wish to put forth the point in no unclear terms that the move will make the gaming industry unviable … this was conveyed to the finance ministry previously as well,” the person said.
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