Ashneer Grover, co-founder of CrickPe, criticizes the Indian government's decision to impose 28% GST on online gaming companies, calling it detrimental to the industry.
Ashneer Grover, co-founder of CrickPe, criticizes the Indian government's decision to impose 28% GST on online gaming companies, calling it detrimental to the industry.
PremiumAs India introduced 28% GST on online games at the 50th GST Council meeting on Tuesday, BharatPe co-founder and former Shark Tank India judge Ashneer Grover has hit out at policymakers.
Grover on Wednesday posted a sarcastic tweet wherein he slammed the GST panel's Group of Ministers for imposing 28% GST on online games. Grover wrote, "India is super fun! Super iconic! Uncles sipping on their drinks, smoke in hand, bragging about how they made their fortunes in land speculation - by putting their cash to good use, planning their next Casino trip to Macau, and passing judgment on online gaming and how it's spoiling the youth".
Grover snarkily added, "Would love to see Govt introduce 28% GST and 20% TCS on land purchases".
Grover believes that 28% GST on online games will turn off the taps of foreign investments not just for online gaming firms but in other startups too.
"You got billions in from foreign investors as FDI. Celebrated FDI inflow! Now the same investors will apply regulatory risk discount to India and funds will dry up. Not only for online games - but across sectors. Across startups," Grover wrote on Twitter.
Author of the book 'Doglapan: The Hard Truth About Life and Start-Ups", Grover asked the Council of Ministers about the timing of their judgments. He said, "From Virat Kohli to MS Dhoni to Saurav Ganguly have endorsed online gaming. Why was India public / Govt / BCCI not outraged by all cricketers endorsing? Why was BCCI allowed to take Dream 11 as a title sponsor?"
Calling tech founders 'dispensable', he concluded, "In the future, all Tech companies will be based in Dubai / Singapore. As an operator Indian regulatory risk makes no sense to put one's own effort - forget raising external capital for it !"
Yesterday Grover wrote another small post on how the Centre has smothered the billion dollars gaming industry by imposing 28% GST. "RIP - Real money gaming industry in India. If the govt is thinking people will put in ₹100 to play on ₹72 pot entry (28% Gross GST); and if they win ₹54 (after platform fees)- they will pay 30% TDS on that - for which they will get a free swimming pool in their living room come the first monsoon - not happening!
It was good fun being part of the fantasy gaming industry - which stands murdered now. $10 Bn down the drain in this monsoon".
He said it was time for startups Founders to enter politics and be represented - or this is going to be spate industry after industry.
Notably, Grover, this year launched a fantasy gaming app CrickPe that seeks to reward cricketers from the total money pot of the game along with players. Grover reportedly raised $4 million in seed funding for his new venture and promised employees a Mercedes Benz car if they work at the start-up for 5 years.
According to a report by the eSports body, the Indian online gaming industry is growing annually at a rate of 30% and is one of the fastest-growing segments within the media and entertainment sector. As of May 2022, the country accounted for 19.2% of worldwide game downloads. The compound annual growth rate of the gaming industry is of approx 22%. In 2021 India recorded about 390 million online gamers.
However, on Wednesday, the GST Council decided to levy 28% GST on online gaming companies. The decision was staunchy criticised by the e-games and sports companies. The All India Gaming Federation (AIGF), which represents companies like Nazara, GamesKraft, Zupee, and Winzo, said the decision by the council is unconstitutional, irrational, and egregious.
Online gaming players have repeatedly urged the government and the GST Council to levy 18% GST on their segment instead of 28%.
E-Gaming Federation (EGF), whose members include Games 24x7 and Junglee Games, said that a tax burden where taxes exceed revenues will not only make the online gaming industry unviable but also boost black market operators at the expense of legitimate tax-paying players.
On Wednesday, shares on Indian online gaming firms Nazara Technologies, Onmobile Global, and Delta Corp slid.
Shares of Nazara Technologies and Onmobile Gaming fell as much as 3.31% and 3.34%, respectively. Delta Corp tanked 25.82% as of 11:25 AM on Wednesday.