Quick Summary
The Indian online gaming industry is at a critical juncture, with Dream11 co-founder and CEO raising concerns over the government's retrospective GST demands exceeding ₹1.1 lakh crore. He warned that if the Centre continues to insist on the tax recovery, most companies in the sector will shut down. Dream11, India's most valuable gaming company, itself faces a ₹28,000 crore GST demand and argues that the over 400 gaming firms affected do not collectively have more than ₹10,000 crore to meet the
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FAQ :
The main concern is the government's demand for retrospective GST payments, amounting to over ₹1.1 lakh crore, which the industry argues most companies cannot afford.
Dream11 faces a GST demand of ₹28,000 crore.
The GST Council decided to impose a 28% tax on the full face value of player deposits, instead of the previous 18% tax on company revenues, and applied it retrospectively from August 2017.
Industry revenues have fallen by 30-40%, profits by 60-70%, venture capital funding has stopped, and some companies have already shut down.
He urges the GST Council to reconsider and tax platforms based on Gross Gaming Revenue (GGR), which is a globally accepted model, rather than on total player deposits.
He is calling for an independent statutory regulator for gaming, similar to SEBI for the securities market, to provide clear regulations and address issues like offshore companies evading taxes.
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