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Layoffs, Closures: 28% GST Hits Online Gaming Industry Hard As Authorities Begin Tax Recovery
OutlookIndia
·
1y ago
Medial
The implementation of a 28% tax on real money gaming (RMG) by the Goods and Services Tax (GST) Council has led to chaos in the online gaming industry in India. Several start-ups, including Dream11 and Games 24x7, have received tax notices amounting to around Rs 55,000 crore. Companies such as Super Group Limited and Nazara Technologies have already stopped operating in the Indian market, while others have resorted to layoffs. The new tax rate will also impact players' winnings and the competitiveness of gaming companies. The future of the industry remains uncertain as companies navigate the challenges posed by the tax changes.
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Supreme Court to hear gaming firms’ challenge to 28% GST rule
Economic Times
·
6m ago
Medial
The Supreme Court is set to hear petitions from online gaming firms and casinos challenging the 28% GST imposition on the full value of bets rather than gross gaming revenue. These firms face significant retrospective tax demands since 2023, fearing coercive actions by tax authorities. The Court had earlier stayed a Karnataka High Court judgment demanding Rs 21,000 crore GST from GamesKraft. The petitions argue against the government's view equating all online betting to gambling for tax purposes.
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Karnataka GST authorities write to 161 online gaming firms, ask them to apply revised rate
Economic Times
·
1y ago
Medial
Karnataka GST authorities have written to 161 online gaming firms asking them to collect GST at a revised rate of 28% on the full face value of bets in online real money games, effective from October 1. The authorities want to ensure that the companies are aware of the recent amendments to the GST laws and have them diligently collect taxes as per the new rate. This move is expected to increase tax revenues in Karnataka by about Rs 1,500 crore annually.
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Dream11 withdraws plea challenging Rs1,200 cr tax notice
Livemint
·
1y ago
Medial
Fantasy sports company Dream11 has withdrawn its petition challenging notices of alleged tax evasion amounting to ₹1,200 crore in the Bombay High Court. The state goods and services tax (GST) authority had withdrawn its show cause notice on Dream11 as the Central GST authorities were pursuing the matter in the Supreme Court. The gaming company was asked to pay a 28% tax on its gross value, with the company arguing that online fantasy sports gaming predominantly involves skill and not gambling.
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SC stays GST notices worth over Rs 1 L Cr against online gaming firms for tax fraud
YourStory
·
6m ago
Medial
The Supreme Court has stayed GST authorities' showcause notices, valued at over Rs 1 lakh crore, against online gaming firms over alleged tax evasion. Justices J B Pardiwala and R Mahadevan ruled that all proceedings against these companies remain paused, pending further hearing. The GST law was amended in October 2023 to require foreign online gaming firms to register in India, with a 28% GST on bets. Various firms challenged these demands, and the Supreme Court consolidated cases for review.
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Nazara Technologies to challenge Rs 2.84 Cr GST demand over export payment delays
YourStory
·
5m ago
Medial
Nazara Technologies received a demand of Rs 5.68 crore from tax authorities for back taxes, penalties, and interest due to export payment delays, with Rs 2.84 crore under GST laws. The company plans to appeal, stating it won't materially affect operations. Nazara's subsidiaries previously faced GST liabilities of Rs 1,120 crore but obtained temporary relief. These subsidiaries contribute minimally to Nazara's revenue. The GST Council raised the tax rate for online gaming to 28% recently.
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GST From Online Gaming Jumped 5X To INR 1,349 Cr In The First 6 Months Of New Regime: FM
Inc42
·
10m ago
Medial
The collection of Goods and Services Tax (GST) by the Indian government in the first six months after the implementation of the 28% GST regime amounted to INR 6,909 Cr. This figure is a significant increase of 412% compared to the INR 1,349 Cr collected in the six months before the 28% GST regime was imposed. The 28% GST tax on the online gaming industry took effect on October 1 and involves a 28% tax on the full face value of bets placed in real money gaming.
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28% GST Effect: Monthly Tax Collections From Online Gaming Platforms Jump To INR 1,200 Cr
Inc42
·
1y ago
Medial
The Indian government has reported a significant increase in monthly GST collections from online gaming platforms since imposing a 28% tax levy in October 2023. Revenues have soared more than 400%, bringing in around INR 1,200 Cr per month. The decision to impose the tax came amid concerns over illegal overseas online gaming sites, with no new platforms reportedly registering in the country since October 2023. Tax officials are facing challenges as these platforms change VPNs and website addresses to evade authorities.
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Tiger Global, ChrysCap, Peak XV ask govt to reconsider GST on online gaming
VCCircle
·
1y ago
Medial
Investment firms Tiger Global, ChrysCap, Peak XV, and ASK have requested the Indian government to reconsider the Goods and Services Tax (GST) on online gaming. They argue that the 28% GST rate on skill-based gaming platforms is excessive and should be reduced. These companies believe that a lower tax rate would encourage growth and investment in the online gaming industry.
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28% GST on online gaming to yield extra ₹20,000 cr yearly: Govt
Money Control
·
2y ago
Medial
According to Revenue Secretary Sanjay Malhotra, the GST Council's move to impose a 28% tax on the full bet value in online gaming would generate approximately ₹20,000 crore in additional annual revenue for the government. Malhotra noted that the online gaming industry currently pays only 2-3% GST, which is lower than the 5% tax applied to food items commonly consumed by individuals.
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Government to impose 28% GST on online games
Entrackr
·
2y ago
Medial
The 50th Goods and Services Tax (GST) Council meeting on Tuesday decided that a 28% GST will be levied on the full face value of online gaming. The move deals a severe blow to the gaming companies that offer real-money games.
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