NEW DELHI: In the GST Council meeting held on Saturday, Delhi finance minister Atishi raised the issues faced by the online gaming industry including the recently proposed 28 per cent Goods and Services Tax (GST) and said that the move could jeopardize the entire sector, potentially leading to significant job losses and hampering foreign investments in the field, official sources said.
She also demanded the withdrawal of tax notices worth Rs 1.5 lakh crore, issued by the Central Govt to the online gaming industry, they added.
The minister, addressing the media before heading to the meeting, said the sector employed over 50,000 youths and attracted Rs 17,000 crore in foreign investments.
“An unstable, erratic tax environment will deter foreign investors in the online gaming industry and impact the overall start-up ecosystem in the country. GST Council decisions in the past including the 28 per cent tax on online gaming industry adversely impacted the industry. The weight of hefty taxes could break the back of the online gaming sector, which is one of the fastest-growing sectors in the startup industry,” she told reporters.
“Excessive taxation on legal online gaming would encourage illegal activities and drive many startups out of business,” Atishi added.
The Delhi minister emphasised that if young start-ups are scared away from the industry, India’s next Flipkart, Zomato, or Paytm might never emerge. All the issues raised by the minister in her press briefing were also put before the GST Council, said a Delhi government statement.
However, the GST Council has went ahead with levying 28% of taxation, subject to a review after six months if a decline in industry growth is observed. In the previous meeting on August 2, the council had approved amendments to the GST laws to provide clarity on the taxation of casinos, horse racing and online gaming.
REVIEW AFTER 6 MONTHS
The GST Council has went ahead with levying 28% of taxation, subject to a review after six months if a decline in industry growth is observed. In the previous meeting on August 2, it had approved amendments to the GST laws to provide clarity on the taxation of casinos, horse racing and online gaming. Atishi said the sector employed over 50,000 youths and attracted Rs 17,000 crore in foreign investments.