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Grover said the industry has gone through a fire test in the Supreme Court to prove itself. (file photo/Twitter)
The entrepreneur, who recently launched the fantasy sports league CrickPe, called the GST board’s move “extremely unfortunate” in an exclusive chat with News18, adding that the rate increase wouldn’t result in higher taxes.
The 50th meeting of the Goods and Services Tax (GST) Board on Tuesday decided to charge 28% GST of full face value on online games. Finance Minister Nirmala Sitharaman told a press conference that online gaming, horse racing and casinos, will all be taxed at the rate of 28%. She added that there will be some amendments to the Goods and Services Tax Law to include online games.
In an exclusive chat with CNN-News18, businessman Ashner Grover called the move “extremely unfortunate.”
“Gambling regulations have evolved,” he said. “The industry has gone through a Supreme Court fire test to prove that it is not a gamble; it is a game of skill.”
In any case, the industry already pays a 28% tax, said Grover, who recently launched the fantasy sports league CrickPe. “By imposing 28% GST, you’ve killed the industry,” he said.
Grover said that an increase in the GST rate would not lead to an increase in tax collection.
“If this is not reversed, the next step is the death of the entire industry,” said the businessman.
In her press conference, Sitharaman said that the impact of the online gaming industry and revenue generation were discussed. “It is not at all in our agenda to destroy the industry,” she added.
Citing the examples of Sikkim and Goa where casinos form a large part of the tourist attractions, the finance minister said there was a detailed discussion on how to ensure that taxes would not affect tourism in these countries or such industries.
“We don’t intend to destroy any of these industries whether it’s gambling, horse racing or online gaming. But it’s all getting complicated. It’s impossible to pierce the veil that brings obscurity over how it actually runs. So there has to be a streamlined system.”
Until now, the 18% GST was only applicable to gaming fees paid by companies, but the 28% tax now applies to the entire pool of funds. Industry insiders said that this will affect earnings and, in turn, the user journey. Already, a 30% TDS is applicable to the winnings.
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