Atishi, the finance minister for Delhi, was against the increased GST rates for online gaming platforms that were announced during the 51st GST Council meeting on Wednesday. She emphasised that placing a heavy tax burden on the quickly expanding sector would have a negative effect on the environment for start-up businesses.
For online gaming, horse racing, and actionable claims in casinos, the 51st GST Council suggested a 28% tax on the face value. In her response, Atishi emphasised the need for a reevaluation of the rates in place in order to support the expansion of new businesses in the Indian online gaming sector.
Atishi noted that the country’s fastest-growing sector is the online gaming industry, adding that ‘investors from India and abroad are drawn to this industry, resulting in investments in the millions and billions of dollars.’ Heavy taxation on this sector will burden it and deter investment.
The online gaming industry, which has grown to be a sizable industry, is being heavily taxed, she continued, despite the fact that the central government talks about supporting start-ups. ‘The Central government should focus on promoting these start-ups, rather than burdening this sector with excessive taxes,’ she said.
According to Atishi, there are more than 40 crore gamers of all ages in the country who use online gaming platforms. ‘This industry is also providing thousands of people with work prospects. If a 28% GST is applied to it, the entire sector might collapse, ruining more than 80% of the linked startups, she warned.’
She said that this tax will immediately result in the loss of 50,000 jobs. This will discourage potential investors from funding any Indian startups out of concern that their investments would result in losses if tax laws change in the future. She demanded that the taxes be revisited, claiming that this detrimental effect will also affect future start-ups.
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