MeitY delays formation of SRBs for gaming industry amid tax concerns

The Ministry of Electronics and Information Technology (MeitY) has delayed the formation of the self-regulatory bodies (SRBs) for the gaming industry, said sources.

The delay in forming the self-regulatory bodies is due to the ministry’s attempt to align consensus among various ministries, including law, finance, and home affairs, before advancing.

It is due to the discussions between ministries on the SRB framework concerns regarding the apparent non-adherence of gaming companies to tax laws

This comes when the gaming industry is under pressure after the government imposed a 28% Goods and Services Tax (GST) on the full face value of real money gaming companies.

Moreover, several gaming companies, such as Dreams 11 and others, have notices demanding GST dues.

The SRBs were supposed to be formed by the industry representatives responsible for distinguishing between games of chances and games of skill and other mandates concerning the industry. They were to be formed by 1 October.

Nearly four industry bodies of the online gaming sector filed three different applications to form SRBs.

After the government decided to levy the 28 per cent GST, several startups are laying off employees or halting operations.

Unicorn online gaming company Mobile Premier League (MPL) laid off 350 employees — nearly 50 per cent of its workforce, while Spartan Poker laid off 125 employees, and Hike Rush Gaming Universe also reduced its workforce by 22 per cent.

Other firms — crypto gaming platform One World Nation and gaming start-up Quizy have temporarily shut their operations.

Gaming companies such as Quizy and Fantok have either shut operations entirely or temporarily halted them in response to the changing landscape.

Meanwhile, Hike and Spartan Poker sacked employees following the GST Council’s decision.

Leave a Reply

Your email address will not be published. Required fields are marked *