Online gaming industry faces potential 50% revenue drop after 6 months of 28% GST implementation
Its been a little over six months after the government implemented a 28 percent Goods and Services Tax (GST) on online gaming bets and the industry is grappling with its impact with no hope of recovering from the slump. Companies are now bracing for a potential revenue drop exceeding 50 percent and some profit making firms have even slipped back into losses.
"We were on a growth path in 2024 but now are running on losses," said a gaming company founder who did not want to be named.
“With the new GST regime our monthly tax outlay has increased 4X. With 60 percent- 70 percent 70 of revenue going towards GST, there's barely any margin left for operations. Everyone is absorbing the tax to avoid losing customers so we are following the same route. We were hoping for discussions in March, but it's now delayed until the first GST meeting after the new government formation,” they added.
The 28 percent GST, implemented in October 2023, is levied on the full value of online gaming bets, not the net winnings (the difference between what's wagered and what's won).
