Ashneer Grover Criticizes Imposed Increase in GST for Online Gaming: “Considering a Political Involvement”
In recent years, the online gaming sector, valued at $1.5 billion, has experienced a significant rise in popularity and has managed to attract foreign investments.
Ashneer Grover, an entrepreneur, strongly criticized the decision made by the Goods and Services Tax (GST) Council to enforce a 28% tax on the revenue generated by online gaming companies. Mr. Grover went as far as stating that this action would severely harm the fantasy gaming industry, and he expressed his belief that it is now opportune for startup founders to consider getting involved in politics. In April of this year, Mr. Grover introduced his own fantasy gaming platform called Crickpe, which enabled users to assemble a virtual team of cricketers based on their current performance. Points were earned based on the actual performance of the players in real matches.
“RIP – Real money gaming industry in India. If the govt is thinking people will put in ₹ 100 to play on ₹ 72 pot entry (28% Gross GST); and if they win ₹ 54 (after platform fees)- they will pay 30% TDS on that – for which they will get free swimming pool in their living room come the first monsoon – not happening!” the BharatPe co-founder said in his tweet.
The individual expressed their disappointment at the current state of the fantasy gaming industry, stating that it was once an enjoyable experience but is now effectively destroyed. They highlighted the significant loss of $10 billion in this context, likening it to money wasted during the monsoon season. They suggested that it is now crucial for startup founders to engage in politics and have their voices heard, as failing to do so may result in a succession of struggling industries facing similar fates.
The online gaming sector expressed its apprehension regarding the implementation of a 28% GST, citing its potential to impede their capacity to invest in new games, disrupt cash flows, and hinder business expansion.
The All India Gaming Federation (AIGF), an organization representing companies such as Nazara, GamesKraft, Zupee, and Winzo, strongly criticized the council’s decision, deeming it “unconstitutional, irrational, and highly objectionable.”
In recent years, the industry valued at $1.5 billion has experienced a significant increase in popularity and has managed to attract foreign investments.
Gaming applications in India, where cricket holds immense national significance and is endorsed by sports icons, have raised concerns regarding potential addiction and financial losses.
Dream11, valued at $8 billion and serving as the primary sponsor for India’s national cricket team, receives support from Tiger Global. Peax XV, formerly known as Sequoia Capital India, has made investments in the MPL app.
Union Finance Minister Nirmala Sitharaman clarified that the decision to impose taxes on the overall revenue generated by gaming companies was made in consultation with the states and with no intention to harm the industry.
Meanwhile, Mr Grover and his wife Madhuri Jain Grover are currently in the midst of multiple court cases filed by BharatPe and its co-founders for an alleged ₹ 81 crore fraud. Last month, the Delhi High Court refused to stay at this stage an investigation against Mr Grover and his wife.
