The investor community claimed $2, saying, “The above decision, which has caused shock and dismay, will substantially and significantly reduce investor confidence in supporting this or any other emerging sector in the Indian tech ecosystem.” 5 billion of capital already invested in this sector will need to be written off. “This will adversely affect the potential investment of at least $4 billion over the next three-four years and hence the growth of the gaming sector in India…” The change in methodology of applying GST rates on “full value” will result in wholesale destruction of the sector including many MSMEs and startups who will no longer be able to sustain their business operations and will be shut down with immediate effect. ,
The companies claimed that the decision would lead to the loss of over 50,000 skilled jobs and over one million people indirectly involved. “The industry also spends about $1 billion on advertisements, which will be completely wiped out, causing a massive adverse impact on the larger media and entertainment industry. ,
He added that with the heavy taxation regime in the organized sector, it is feared that unregistered and “unscrupulous platforms” will step in to attract gamers. Pay immediate attention to the matter,” said the investors.
Investors pointed out that if the “full value of the bet” were to be interpreted in such a way that GST was levied on every contest played with fully taxed winnings, the GST burden would increase by 1,100%. Furthermore, due to taxation on re-projected player winnings, the same money will be taxed again and again, resulting in a situation where more than 50-70% of each rupee will go towards GST, “thereby making the online real money skill gaming business model unviable”.