Tax research unit, Mail company

New Delhi, May 17 As a critical meeting of the Group of Ministers (GoM), formed to discuss GST on online gaming takes place on May 18, a controversial proposal by a unit of the Finance Ministry, could spell the death knell for most gaming companies in India.The Tax Research Unit (TRU) of the Department of Revenue of the Finance Ministry has recommended charging 28-30 per cent of the gross Contest Entry amount. Currently 18 per cent GST is charged only on the platform fee by gaming companies.An industry source told , "Currently, the platform margins range between 5-10 per cent for all formats, except fantasy sports. Esports like chess, carrom, car racing, first-person shooter, etc. charge around Rs 8 for 100 rupees deposited by the user. This becomes the revenue for the gaming companies and the remaining 92 rupees is paid back to the winner of the contest. Similarly, for skill-based cards games, platforms charge Rs 5-10 for every 100 rupees given by the user."The source added, "Only in fantasy sports, the platforms charge around Rs 15 for every 100 rupees provided by the user. Therefore, if the TRU's recommendations are accepted, the GST liability on the gaming companies will be 2-3X of the revenue of gaming platforms, except for fantasy platforms."Fantasy gaming in India, which usually peaks during the IPL, is dominated by few operators, with Dream11, MPL and My11Circle controlling over 95 per cent of the market. There are over 950 platforms in India that offer esports, casual games and card games.The gaming industry, directly and indirectly, employs lakhs of people in the sector. All these smaller companies, along with their investment and employment, could potentially be wiped out.Disclaimer: This post has been auto-published from an agency feed without any modifications to the text and has not been reviewed by an editor

Home

City

Latest News

Cricket

LT Premium

National

International

Maharashtra

Opinions

Chhatrapati Sambhajinagar

Nagpur

Entertainment

Photos

Business

Technology

Sports

Lifestyle

Social Viral

Lokmat Games

Health

Narendra Modi

Lok Sabha Election 2024

Heatwave In India

Mumbai Mega Block

Maharashtra Lok Sabha Election

T20 World Cup 2024

Tax Research UnitFOLLOW

Tax research unit, Latest News

Cricket :GST proposal by unit of Finance Ministry could potentially wipe out all gaming companies in India

New Delhi, May 17 As a critical meeting of the Group of Ministers (GoM), formed to discuss GST ... ...