Delhi's Finance Minister, Atishi, has called for the withdrawal of tax notices issued to the online gaming industry ahead of the GST Council meeting. Atishi voiced concerns that the proposed 28% Goods and Services Tax on online gaming firms could pose a significant threat to the entire Indian startup sector.
During a virtual press conference, she emphasized the sector's vital contributions, citing its ability to attract ₹70,000 crore in foreign investment, with an additional ₹25,000 crore expected soon.
The Finance Ministry's revenue department recently sent out retrospective GST claims as high as ₹1.5 trillion across the gaming industry, categorizing real-money gaming firms as gambling entities. Leading gaming companies are currently in the process of receiving these notifications, scheduled for completion by the end of the month.
Atishi highlighted the importance of a stable tax environment for startups, stating that the erratic taxation could lead to the closure of the online gaming industry, thereby jeopardizing jobs and hindering foreign investments.
She criticized the GST Council's decision, noting the contradiction between promoting startups and implementing policies that could potentially harm the industry.
Entrepreneurs and startups have been instrumental in boosting the Indian economy, creating jobs, and fostering innovation. Atishi urged the GST Council to reconsider its stance, underlining the necessity of policies that support the growth and sustainability of the startup sector. As the GST Council convenes, the fate of the online gaming industry and its implications for the broader startup ecosystem hang in the balance.