A 28 percent tax on Goods and Services contemplated by India’s Finance Minister Nirmala Sitharaman prompted investors from Alpha Wave Global, Steadview Capital Management, Sequoia Capital and Raine Group to pen a letter warning that it could squelch the growth of the $20 billion skill-based gaming industry.
The same tax would apply to casinos and wagers on horse racing. The current tax is 18 percent.
The letter argues that the tax structure would harm the sector’s viability and encourage illegal and gray market gambling. The nascent online skill gaming sector is expected to double between now and 2025.
Such a high tax structure could prevent that growth from happening, said the investors.
They wrote: “As investors in global gaming companies, our experience suggests that both in Europe and the Americas where most regulators have realized that on the internet where there are no national borders, citizens of a country are best served by a regulatory regime that promotes a local gaming industry with constructive tax policy and a regulatory structure to protect users with focus on fairness and responsibility. . . “
The Goods and Services Tax Council met on June 29 but deferred a decision on the tax.
