Ashneer Grover, co-founder of CrickPe, condemns the Indian government’s proposal to levy a 28% GST on online gaming companies, claiming that it will harm the industry.
BharatPe co-founder and former Shark Tank India judge Ashneer Grover lashed out at policymakers as India introduced 28% GST on online gaming during the 50th GST Council meeting on Tuesday.
Grover blasted the GST panel’s Group of Ministers for imposing a 28% GST on online gaming in a satirical tweet on Wednesday. “India is super fun!” wrote Grover. Very iconic! Uncles drinking their cocktails, smoking their cigarettes, talking about how they got their riches in land speculation – by putting their money to good use, planning their next Casino vacation to Macau, and pronouncing judgment on online gaming and how it’s corrupting the youth.”
“Would love to see the government introduce 28% GST and 20% TCS on land purchases,” Grover said.
Grover feels that the 28% GST on online games will deter foreign investment not only in online gaming enterprises but also in other startups.
“You received billions of dollars in FDI from foreign investors.” We celebrated the inflow of FDI! The same investors will now apply a regulatory risk discount to India, causing capital to dry up. Not just for online games, but for all industries. “Across startups,” Grover tweeted.
Grover, author of “Doglapan: The Hard Truth About Life and Start-Ups,” questioned the Council of Ministers on the timing of their decisions. “Everyone from Virat Kohli to MS Dhoni to Saurav Ganguly has endorsed online gaming,” he remarked. Why were the Indian public, government, and BCCI not angered by all cricketers endorsing? “How did BCCI get Dream 11 as a title sponsor?”
He stated, “In the future, all Tech companies will be based in Dubai / Singapore.” He called IT founders “dispensable.” As an operator, it makes little sense to devote one’s own work towards Indian regulatory risk, let alone raise external funds for it!”
Grover posted another brief piece yesterday about how the Centre has suffocated the billion-dollar gaming business by implementing a 28% GST. “Rest in Peace – India’s Real Money Gaming Industry.” If the government believes that individuals will put in $100 to play on a 72-pot entry (28% Gross GST); and if they win $54 (after platform costs), they will pay 30% TDS on that – in exchange for a free swimming pool in their living room come the first monsoon – that is not going to happen!
It was a lot of joy being a part of the fantasy gaming business, which is now being slaughtered. In this rainstorm, $10 billion has gone down the drain.”
He stated that it was time for startup founders to enter politics and be represented, or else this would be industry after industry.
Notably, Grover this year created CrickPe, a fantasy gaming software that aims to reward cricketers as well as participants from the entire money pool of the game. Grover reportedly raised $4 million in seed capital for his new enterprise and promised staff a Mercedes-Benz automobile if they worked for the company for five years.
According to an eSports body research, the Indian online gaming business is growing at a 30% yearly rate and is one of the fastest-growing divisions of the media and entertainment sector. The country accounted for 19.2% of global game downloads as of May 2022. The gaming industry’s compound annual growth rate is approximately 22%. In 2021, India will have approximately 390 million internet gamers.
However, the GST Council resolved on Wednesday to levy 28% GST on online gaming enterprises. The judgment was roundly condemned by the e-games and sports industries. According to the All India Gaming Federation (AIGF), which represents companies such as Nazara, GamesKraft, Zupee, and Winzo, the council’s judgment is unlawful, unreasonable, and outrageous.
Online gamers have frequently petitioned the government and the GST Council to levy 18% GST on their industry rather than 28%.
According to the E-Gaming Federation (EGF), whose members include Games 24×7 and Junglee Games, a tax burden in which taxes surpass earnings will not only make the online gaming industry unviable, but will also benefit black market operators at the expense of genuine tax-paying players.
Shares of Indian online gambling companies Nazara Technologies, Onmobile Global, and Delta Corp fell on Wednesday.
Nazara Technologies and Onmobile Gaming stock dropped as much as 3.31% and 3.34%, respectively. Delta Corp was down 25.82% at 11:25 a.m. on Wednesday.