New Delhi: Several experts have criticised the Union government’s decision to impose a 28% tax on online gaming, saying that it will wipe out the entire Indian gaming industry and lead to job losses.The Goods and Services Tax (GST) Council on July 11 decided to levy a uniform 28% tax on full face value for online gaming, casinos and horse-racing.According to the Indian Express, in the Monsoon Session of parliament, the government will bring in amendments to the GST-related laws to include online gaming and horse racing in Schedule III as taxable actionable claims.An actionable claim, under the GST, is defined as goods under the Central Goods and Services Tax Act, 2017. So far, lottery, betting, and gambling were classified as actionable claims. Now, horse racing and online gaming will be added.In the GST Council meeting, state finance ministers expressed concerns over the growing addiction to online gaming, especially among children, the newspaper learnt.Therefore, a decision to levy a uniform tax of 28% on full face value for online gaming, horse-racing and casinos was taken in the meeting.Three industry bodies – All India Gaming Federation, E-Gaming Federation and Federation of Indian Fantasy Sports – have issued a joint statement saying that the tax may be levied on a total pool (prize money pooled plus the platform commission) and not on gross gaming revenue.If the latter is implemented, it will mean the demise of the online skill gaming industry in India, they said.Criticising the government’s decision, Ashneer Grover, founder of BharatPe, said that the move will destroy India’s booming gaming sector, and that tech startup founders must enter politics for their voices to be heard.Grover has his pwn gaming startup called Crickpe, a fantasy cricket mobile game.“RIP – Real money gaming industry in India. If the govt is thinking people will put in Rs100 to play on Rs72 pot entry (28% Gross GST); and if they win Rs 54 (after platform fees)- they will pay 30% TDS on that – for which they will get a free swimming pool in their living room come to the first monsoon – not happening!,” he tweeted.RIP – Real money gaming industry in India. If the govt is thinking people will put in ₹100 to play on ₹72 pot entry (28% Gross GST); and if they win ₹54 (after platform fees)- they will pay 30% TDS on that – for which they will get free swimming pool in their living room come…— Ashneer Grover (@Ashneer_Grover) July 11, 2023“The implementation of a 28% tax rate will bring significant challenges to the gaming industry. This higher tax burden will impact companies’ cash flows,” Aaditya Shah, chief operating officer at the gaming app IndiaPlays, told Reuters.“The decision ignores over 60 years of settled legal jurisprudence and lumps online skill gaming with gambling activities. This decision will wipe out the entire Indian gaming industry and lead to lakhs of job losses and the only people benefitting from this will be anti-national illegal offshore platforms,” said All India Gaming Federation (AIGF) CEO Roland Landers, reported Mint.The AIGF represents companies like Nazara, GamesKraft, Zupee and Winzo.Landers added that the decision “unconstitutional (and) irrational”.Amrit Kiran Singh, chief strategy advisor to the founders of the skill-gaming firm Gameskraft, told Moneycontrol that the move “negates all the good work” that the government has done to support the industry.“Today’s decision at the GST Council is not in national interest as it will destroy a significant portion of the successful companies in India’s startup ecosystem. Unfortunately, it also appears to show that the different limbs of the government are not in sync,” he said.He added that the government’s decision will only support the cause of the overseas gaming companies and encourage the Indian industry to migrate overseas.“The approach leaves many feathers ruffled, 28% on total consideration is like imposing a sin-tax on online skill gamers akin to one on cigarettes and alcohol. This lacks merit and is devoid of rationale. Contrary to position adopted in several leading international jurisdictions, a 28% tax on online skill gaming is a new low made in GST’s history without a thought to how businesses would survive it,” Adarsh Somani, Partner, Economic Laws Practice, told Mint.Joy Bhattacharjya, director general at Federation of Indian Fantasy Sports told Moneycontrol that this “move will severely disrupt the sector, hindering capital inflow, impact growth and lead users to illegitimate, offshore platforms.”