SoftApp38

Thoughts on 28% GST for online gaming?

Folks at Dream 11, Games24×7, Junglee, etc how's the environment in the office? Have there been any updates from the leadership regarding the direction they'd be taking? As of now, here at Gameskraft it's an elephant in the room with everybody in denial, talking about how we can still survive and no updates from leadership yet.

16mo ago

ProteinPancakes

Dream 1116mo

I’m from a esports gaming company. Spoke to my CEO regarding this today morning.

This move is completely short sighted and reinforces how bad policymakers are in our country. This might kill small companies in the short/medium term altogether.

Gaming companies based out of India that were looking to raise funding will have the hardest time doing so going forward. 28% GST + income tax on the company end. ₹100 deposited directly being reduced ₹72 in your account. The government ends up earning almost 50% from players AND the company.

I’m seeing boomers applaud this move as they want the new generation to “focus more on less time wasting activities”, but they don’t know anything about the numbers of the gaming industry outside of India. Indian esports and gaming is just at the beginning of its rise. This move sets it back in terms of investment and revenue heavily.

Luckily, we’ll have an entity setup in the UAE soon, and that entity will in a few months become the holding entity, with the Indian entity being a subsidiary. Many more companies will do this, and the government will see how this increase in taxes backfires because companies will just create holding entities outside of India :)

potatomato

Fintech Startup16mo

Holding companies will save the company taxes, but will it have any impact on the payout received by the users?

ProteinPancakes

Dream 1116mo

That won’t matter to companies. In the end what matters to D11, MPL, or any other company is the revenue they make. They’ll end up paying 5-10% taxes in other countries.

As for the user, the ₹100 deposited will stay ₹100, won’t be ₹72 by default. And they’ll have to only pay the GST on winnings. A majority of people won’t mind that as long as they’re getting their monies worth.

incognito

Stealth16mo

@StrawhatSasuke what are you smoking I want some.

Moving your business to Dubai changes nothing. You think Nestle can ignore GST and corperate tax in India because it's a Swiss company?

A subsidiary will be collecting revenue and making deposits to Indian consumers. Gov has domestic consumers and companies by the balls, no way around it.

Furthermore, 28% of winnings tax was always there. What is new is the proposal to tax whole friggin cash pot. And not just one time on cash deposit. Every. Friggin. Pot. ABSOLUTELY INSANE.

Most RMG companies operate at 10% ebita. This margin will be decimated. Everyone except D11 is done.

ProteinPancakes

Dream 1116mo

I’m just telling you the conv I had with my boss. This doesn’t affect us much in the long term because our holding company will change. We will still pay GST here but from the subsidiary that won’t be earning much in india anyways

incognito

Stealth16mo

Sure, If you are not earning from Indian consumers this will have very little effect on you.

An Indian account, attached to an Indian company would be needed to collect revenue from any local payment gateways gambling apps use. So a subsidiary would pay corperate tax on the profit.

Doing anything else would carry too much risk of jail time.

Toph56

Stealth16mo

Do you guys suppose this argument can be extended to trading too? It’s also real money gaming in some sense. 🤐🤐🤐😅😅

SoftApp38

Stealth16mo

1% of day traders make money Public: Trade at your own risk 5% RMG players make money Public: This is literally the sole cause of society's downfall

Toph56

Stealth16mo

Incorrect stat - 11% people make money in trading. So that way it’s definitely better than RMG if RMG is at 5%.

It’s highly regulated with strict controls on KYC, anti-money laundering etc. And trading provides liquidity, makes price discovery better and also allows people to hedge. :) yes people also call it gambling. What to say!

mautkebaadcashhai

Freelancer16mo

stop calling any of this gaming ffs. online casino, that's all it is.

AmusedPM

Flipkart16mo

It’s applicable on buying skins inside games as well. That’s not gambling

randomadvert

Stealth16mo

no it’s on gains only

tea

Stealth16mo

Did someone check with Ashneer?

AmusedPM

Flipkart16mo

Looks like next company will be third unicorn now .

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Curated from across

AGIcomingGoogle16mo

28% GST on online gaming. Tough times for dream11, mpl etc

Online gaming startups are among those rare breeds which were profitable . With this move, even they will be forced to do layoffs..

AdeptViola24KPMG16mo

Centre has decided to impose 28% gst on Online gaming. How will companies like Dream11, Games2win, Nazara etc pivot now?

UtterBlade55InMobi16mo

Nazara, Winzo, and others write to govt to protest 28% GST on ‘online skill gaming’

Looks like the gaming federation is trying really hard to lobby government and get the decision reversed. Any thoughts?

entrackr.com

Nazara, Winzo, and others write to govt to protest 28% GST on ‘online skill gaming’

Earlier this week, the 50th GST Council meeting decided that a 28% GST will be levied on the full...

youStealth16mo

After 28% GST, what’s the scene like in the offices of fantasy gaming offices?

Dream11, Crikpe and all others

RiseUp123Stealth14mo

Gaming Startups post GST rule

Hey viners Not heard a lot about gaming startups after the first 2-3 weeks of that new GST rule. How are the gaming startups like Dream11, Games24, Junglee, Zupee doing? Has there been in shift in revenue model?

Or get it on the stores.

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