Ashneer Grover says startups founders must enter politics, slams govt over 28 per cent tax on online gaming

By Abhik SenguptaIndian tech entrepreneur and co-founder of BharatPe, Ashneer Grover, has slammed the government’s move to impose 28 per cent GST (Goods and Services Tax) on online games — the highest rate levied in the GST slab. In a tweet, Grover suggests the move will destroy India’s booming gaming sector, and that tech startup founders must enter politics for voices to be heard. His concerns also revolve around his startup, Crickpe, a fantasy cricket mobile game. Crickpe also lets users earn money by signing up for paid leagues and winning a cash pool.

In a tweet, Grover notes, “RIP – Real money gaming industry in India. If the govt is thinking people will put in Rs 100 to play on Rs 72 pot entry (28 per cent Gross GST); and if they win Rs 54 (after platform fees) – they will pay 30 per cent TDS on that – for which they will get a free swimming pool in their living room come the first monsoon – not happening!”

His tweet adds, “It was good fun being part of the fantasy gaming industry – which stands murdered now. $10 Bn down the drain in this monsoon. Time for startup founders to enter politics and be represented – or this is going to be spate industry after industry.”

The Crickpe founder was lashing at the GST Council’s decision to levy a 28 per cent tax on online gaming. The new tax rate will be imposed on the entire transaction value in the case of online gaming. The decision will impact several gaming companies, including Dream11, MPL, Gameskraft, and Games 24×7.

Not just Grover, India’s oldest and largest online gaming group, ll India Gaming Federation along with the E-Gaming Federation and Federation of Indian Fantasy Sports (FIFS) are unhappy with the council’s decision from increasing GST on online skill games from 18 per cent to 28 per cent.

In a joint statement issued, the three industry bodies said that what is more worrying is some media reports suggesting that the tax may be levied on a total pool (prize money pooled plus the platform commission) and not on Gross Gaming Revenue (GGR). The latter, if implemented, they said, will mean the demise of the online skill gaming industry in India.

Roland Lander, CEO of the All India Gaming Federation said in a statement that an increased tax rate, and then levying the tax on the entire contest entry amount (instead of GGR), will be “catastrophic for the industry, even nipping its potential in the bud.”