Gaming platform Mobile Premier League will lay off 350 employees as it takes steps to "survive" 28 percent imposed on online gaming companies, according to an internal company mail on Tuesday.Last week, Union Finance Minister Nirmala Sitharaman said the decision will be reviewed after 6 months of its implementation or April 2024 by the Goods and Services Tax (GST) Council to see if any change in rule is required.
The GST Council had at its meeting last month decided to levy a 28% GST on full face value of bets placed. The Centre will bring amendments to the Central GST law in the ongoing monsoon session of Parliament, following which states will pass the amendments in their respective assemblies to pave the way for the introduction of changes in the law by October 1.MPL co-founder Sai Srinivas in an email to employees said that it was confirmed last week that a 28% GST will be levied on the full deposit value rather than on Gross Gaming Revenue. ''The new rules will increase our tax burden by as much as 350-400%. As a business, one can prepare for a 50% or even a 100% increase, but adjusting to a sudden increase of this magnitude means we need to make some very tough decisions,'' Srinivas said.
Half the workforce employed by the company could be laid off, with the product team to be the most affected with more than 60 job cuts, a source familiar with the information told Reuters. The source could not be named as they are not authorised to speak to the media.It is not clear how many employees the company currently has. MPL is backed by Peak XV, previously known as Sequoia Capital India.