Ashneer Grover, the founder of BhartPe, slammed the GST council for suggesting that online gaming be taxed at the highest rate of 28%. He didn’t hold back when he questioned the suddenness of the decision and harshly criticized India’s governmental risks. He even predicted that tech companies would move to places like Dubai or Singapore, where things were better.
During his time on Shark Tank India, Ashneer Grover was used in jokes.
Ashneer agreed with a Twitter user who pointed out policy inconsistencies. In answer, he asked, “Why judge online gaming now?” Online gaming has been backed by everyone from Virat Kohli to MS Dhoni to Sourav Ganguly. Why didn’t the Indian people, government, or BCCI get mad when all the cricketers endorsed it? Why did BCCI give Dream 11 the right to be the top sponsor? Sab Doglapan hai. The only truth is that tech leaders are replaceable.
The Shark Tank India star also said that it is not practical for operators to put in work or try to get money from outside India because the regulatory situation is uncertain. “All tech companies will be based in Dubai or Singapore in the future. As an operator, it doesn’t make sense to put one’s effort into Indian legal risk. Forget about getting outside money for it!”
India charges GST on online games.
At its 50th meeting in New Delhi on Tuesday, the Goods and Services Tax Council said online gambling, horse racing, and casinos should pay 28% GST at total value. Union Finance Minister Nirmala Sitharaman noted this after the meeting.
Also, the GST Council wants to change the CGST Act so that online games and horse racing are included in Schedule III as taxable claims that can be made. Whether the game is based on skill or luck, this tax must still be paid.
What do people in the business world think about the 28% GST levy?
“The new tax rate will have far-reaching effects on the industry and call into question whether or not it can even stay in business. According to Siddharth Sharma, SVP-Business Strategy, Head of Digital Works (A23), this burden will not only slow the growth of this new industry but also make it harder for new ideas and chances to come about.
He also said that it goes against how rules have improved for online games in recent months.
Sharma said, “Businesses have a good reason to worry that this change will push people toward betting and gambling sites that don’t follow the law.”
Kartik Solanki, Partner-Indirect Tax at BDO India, said that the new taxation recommendation would mean that the online gaming business would have to pay a lot more than they do now when they only pay tax on platform fees.
Solanki also said that the taxes would make it harder to know who was responsible for what in the past, which is already a point of contention.
“In the case of Gameskraft Technologies Pvt. Ltd., the Hon’ble Karnataka High Court ruled that online games like rummy are games of skill that don’t fall under “betting and gaming,” so they are not subject to GST.
Don’t want to kill any business: Sitharaman.
At the press conference after the GST council meeting, Sitharaman was asked if the government wants to discourage e-gaming because it is terrible for kids. The finance minister said the council does not want to kill industries. The FM said there was talk about whether these things should be taxed at the same rate as people need to live. But, she said, the council chose “not to send the wrong message to the country” by lowering taxes on these industries to the same level as taxes on essential goods.
“We don’t care if a game is based on skill, luck, or both. All we care about is how much money it makes that can be taxed,” Sitharaman said.
“There were some intense talks about online games. MeitY will likely give a list of games that will be included or omitted. Our stance on taxes is clear. We will still ensure it follows MeitY’s rules,” the FM said.