The August 2, GST Council meeting appears to be the final blow for the gaming industry, leaving stakeholders fearing the worst.
All India Gaming Federation (AIGF) said the decision by the GST Council of valuation on deposits will severely impact the online gaming sector and result in a situation where a majority of players, including the MSMEs will no longer be able to survive in the face of the increased tax liability of 400-500%.
“Only established and well entrenched skill gaming companies may be able to scrape through this change by using their existing capital reserves to counter the effects of substantially increased tax liability. However, even their revenues and valuations will significantly fall,” said a statement from the body.
E-Gaming Federation (EGF) and FIFS (Federation of Indian Fantasy Sports) said the burdensome increase in GST will set the Indian online gaming industry back several years.
Stakeholders also fear that the move will open the gates to illegal offshore platforms.
Looks like, that gate is already opened.
Offshore betting companies, known for enticing players with easy money-making options, have added a new element to their bait. ‘No tax’.
Amidst the GST chaos, platforms like 1xBet, WinBuzz, Fairplay are leveraging their active presence and partnerships with actors and influencers on social media by are collaborating with micro-influencers (10,000–100,000 followers) and nano-influencers (100 to 10,000 followers) to distribute codes that promise extravagant perks such as ‘No TDS’, ‘No GST’, and even ‘Lossback Bonus’.
Read More: India’s proposed 28% GST on online gaming among the highest in the world