As the GST council meets to address concerns and provide clarity on tax treatment after the recent decision to impose a 28 percent tax on the face value of real-money game, some homegrown brands are already shutting shop.
RMG platform founder, Sachin Yadav took to his LinkedIn account to announce the closing of his company Quizy.
“Recent GST changes have thrown significant challenges our way. The removal of the TDS exemption limit and the adding flat 30 percent TDS on all winnings, regardless of the amount, hit us hard. This sudden change substantially impacted player earnings and motivation, leading to a decline in user engagement and loyalty,” he said in his post.
Budget 2023-24, proposed two new provisions for Tax Deducted at Source (TDS) on online gaming. The first provision suggests a 30 percent TDS on the payment of net winnings in a financial year. The second provision aims to eliminate the current Rs 10,000 threshold for the levy of TDS.
“Over the past 3 crucial years of our life, I and Amit Kumar poured our hearts and souls into building Quizy that captured the excitement & pretty good scale of over a million users. We were driven by a shared vision of creating an innovative gaming platform and turning it into a profitable venture. However, pained to say this, recent developments in the tax landscape and regulatory environment have left us with no choice but to bid farewell to our beloved gaming venture,” the post on Yadav’s professional networking social platform read.
In the post announcing the shutting down of Quizy, Yadav also urged policymakers and industry stakeholders to engage in meaningful dialogue and collaboration to strike a balance that supports innovation, economic growth, and responsible gaming.
“The gaming industry holds vast potential to be a catalyst for positive change and employment opportunities, and it deserves a nurturing environment that allows it to flourish,” he added.