28% GST on online gaming: MPL to lay off 350 employees

MPL Layoffs 2023: Gaming platform Mobile Premier League (MPL) is set to lay off 350 employees to tackle the 28% GST that is imposed on online gaming. This represents about 50% of the company's employees in India.

MPL co-founders Sai Srinivas and Shubh Malhotra said in an email that the new rules would increase the tax burden by as much as 350-400%. They added that due to this added pressure, the company is forced to take some tough decisions.

"The new rules will increase our tax burden by as much as 350 percent-400 percent. As a business, one can prepare for a 50 percent or even a 100 percent increase, but adjusting to a sudden increase of magnitude means we need to make some very tough decisions," MPL co-founders Sai Srinivas and Shubh Malhotra said in an email to employees.

Also Read: 28% GST on online gaming stays; to be reviewed after 6 months of roll-out

The email also mentioned that their variable costs predominantly involve people, server and office infrastructure and that the company has already initiated work on revisiting their server and office infrastructure costs. "Despite this, we will still have to reduce our people related costs" the email read.

This will be the 2nd round of layoff by the gaming platform. In May 2022, the company had let go of more than 100 employees.

Also Read: 28% GST on online gaming stays; to be reviewed after 6 months of roll-out

The GST council last month imposed a 28% GST on all online gaming that involved real-money. Currently, Gaming platforms pay 18% GST. While the gaming industry had requested for a review, Finance Minister Nirmala Sitharaman has said that the decision will be reviewed after 6 months of its implementation or in April 2024 by the Goods and Services Tax (GST) Council to see if any change in rule is required.