Yesterday’s decision in the GST council will likely have huge impact on the entire gaming industry as the council has decided to levy 28% GST on it.
Real money gambling apps, casino, horse racing are badly hurt anyways but this news is supposed to impact other online gaming sites and apps as well.
The rain pain for these online gaming industry is…
Let’s assume their revenue is 100 rs
They have to either charge 128 rs for it or decrease their revenue.
Revenue - 100
GST - 28
TDS - 30
Appstore - 10-30
When nearly 50% goes in taxes and charges and rest of it is like advance tax blocking the funds for 6-12 months. It’s almost impossible to do the business.
There is a philosophical dilemma involved in this.
One side we can say, lot of children and young adults were wasting their money and time on gambling and gaming and the whole cricket and entertainment Industry became part of the culture advertising people to play fantasy sports and stuff like that.
On the other side, genuine entrepreneurs building interesting stuff on this front will most likely be out of the game due to the rules.
@nithin your thoughts on this decision by GST council?
If two players go with 128 rupees, they will be allowed to play with 100. In games like dream 11, I think one can get back 180. Now 30 percent tds on this is 54. So we are left with 126 back with the players in total.
So both in total came with 256 rupees and now total money with players is 126. Wowwww.
They’re basically trying to increase income for the government for to provide a bigger defense budget and also other developments of the nation. They’re targeting the sectors of the nation which are contractually loss-making for at least several people on the platform. They will never touch the securities markets because this is where the economic developments of the nation are very sensitive, affecting this markets will prove counter-point to their purpose of raising funds for national defense and development.
But they did touch the securities market. When they introduced LTCG tax. Chidambaram introduced STT etc to compensate for a lack of LTCG tax. But the Modi government introduced LTCG on top of STT.
Although now I’m realising securities markets doesn’t come under GST as it isn’t any product or service, we’re paying income tax here, so I don’t think so how GST could be threatening to the securities market. I’d like to retract my second statement.
Its upsetting to me. The Modi Govt has increased taxes almost every year that they have been in power.
We are now among the highest tax-paying nations in the world (if you count direct plus indirect taxes). Also, STCG is 15% and for international private equity is 20% i think.
But what can we do I mean? We pay at most of 28% GST and if we make international trades, then there might be additional custom duties. But At most 30% income tax and 28% GST, so assuming the whole 70% of the remnants are spent for items that cost max GST, we stand at 50.4% taxations at worst, yeah now I’m getting upset too. I think the best idea would be to get the majority which doesn’t pay any taxes to pay them and all the freefund enjoyers to be made devoid of it. Only if we could get everybody to pay taxes.
We should be happy knowing we don’t come under the 30% slab, I mean, isn’t that really a good news? And if a person makes an income it’s fair it be taxed. It would be unfair of us to expect no taxes at all. I mean, how would the government function otherwise, but they’re taxing overlimit yeah that’s totally right. Our primary fault is we put a businessman Gujarati as Prime Minister. If you put a Gujarati at such position you can only expect taxes to increase. We shall wish for Modi to retire ASAP. Next elections aren’t very far. He done looting us. There’s no alternative Gujarati and I’m sure that’d be a good news.
I feel if i read between the lines this move was nail in the coffin for black money hoarder which was converted to white money using such industries. There is series on Netflix called “Ozark” which explains the intricacies.Eradicating black money was in menifesto as well.
Secondly, if you go by data almost 20% of population is indirectly getting addicted to such games majority being youth. This gst will kill these.
But yeah, its a blow to industry particularly to investors and founders as this will kill the industry.
but this news is supposed to impact other online gaming sites and apps as well.
