Reading Between The Lines of the Online Skill Gaming Industry’s Letter On Concerns Over GST Hike

"The proposal to charge GST on the full deposit value will reverse the growth trajectory of the industry," said over 100 online skill-gaming companies in a letter to the Indian government, viewed by MediaNama. The development comes after the GST Council's recent decision to impose 28% GST on the full game value of online games involving wagering, irrespective of whether they are games of skill (non-gambling) or chance (gambling). The skill-based industry has warned that the hike from 18% will decimate industry revenues, a stance reiterated in the letter as well: "This would potentially have devastating implications (including business shut down) for MSMEs and start-ups that may not have the capital reserves to withstand such a sharp tax increase," the letter co-signed by industry majors like Gameskraft, Head Digital Works, Nazara, and WinZO said. "Further, this decision will encourage offshore gambling operators, drive Indian users to them and ultimately lead to neither optimal tax collection nor the growth of the legitimate industry." As an alternative, the grouping suggested imposing the 28% hike on the platform fee imposed by companies, or the gross gaming revenue earned by the industry. "Even though such an increase will be challenging for the industry, the industry supports this increase to be a contributor to nation-building," the letter observed. "This is similar to any other technology service platform, where only the revenue that platforms earn should be considered for the purpose of levy of GST". Reading Between the Lines of the Letter's Claims Hampers Digital India goals and…