Gaming industry will shut down if cos need to pay Rs 1.1 lakh crore in past GST demands
NEW DELHI: Seeking an independent statutory regulator like Sebi to manage the affairs of the online gaming industry, Harsh Jain, the co-founder and CEO of the country’s most valuable gaming company Dream11, has said “the majority of companies will shut down” in case the Centre continues to insist on its notice to recover over Rs 1.1 lakh crore in GST demands, including those slapped retrospectively (stayed by Supreme Court on Jan 10).
Dream11, which itself faces a Rs 28,000 crore GST demand, has said the over 400 gaming companies involved in the GST notices do not have more than Rs 10,000 crore with them to make up for the tax demand. “All the big financial numbers that you see for us are in terms of our valuations (at the time of fund raises). But valuations can’t pay taxes. The full industry will shut down if forced to pay the tax demand,” Jain told TOI.
The GST Council had on October 1, 2023, imposed a 28% tax on the full face-value of player collections on online real-money gaming platforms instead of the previous 18% on the revenue of companies.
In what made matters worse for the industry, the govt said that the tax will apply retrospectively, covering transactions from August 2017 to October 1, 2023. Jain, who had co-founded Dream11 in 2008 with Bhavit Sheth, says this demand is unviable and untenable.
