Delhi’s FinMin Atishi Calls For Withdrawal Of Tax Evasion Notices For Online Gaming Companies, Says This Will End The Industry

Atishi noted that the entire online gaming industry is worth Rs 23,000 crore and these tax notices will end up destroying not only the gaming sector but also weaken the start-up sector in India.

Atishi added that the online gaming sector is considered the sunrise sector in the Indian start-up industry as it is the biggest growing sector on the start-up scene.

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Delhi’s Finance Minister Atishi Marlena on Saturday called on the GST Council to withdraw tax evasion notices sent to online gaming companies, stating that these notices will end up destroying the entire online gaming industry. Addressing a press conference, the state minister said that she will be bringing forth the request to withdraw tax evasion notices of Rs 1.5 lakh crore sent by the GST Council at it’s meeting during the day. 

Notably, the GST Council in it’s earlier meeting stated that the online gaming industry will now be taxed under the 28 per cent slab. Later, the body also sent notices of tax evasion for the last six years to online gaming companies.

Talking about the impact of the tax notices, Atishi said that the entire online gaming industry is worth around Rs 23,000 crore and these tax evasion notices worth Rs 1.5 lakh core will end up destroying not only the gaming sector but also weaken the start-up sector in India. "If an industry is worth Rs 23,000 crore, how will it manage the tax notices of 1.5 lakh crore? This will end the whole sector. No company will be able to survive this. This will result in companies being unable to pay taxes and shutting down. This will also result in all the young developers and programmers employed in the industry losing their jobs. Further, this move will destroy the employment potential of this industry," she noted.

 

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The state finance minister stated that the online gaming industry employs 50,000 people and has attracted foreign investment worth Rs 17,000 crore so far. She said, "Rs 25,000 crore worth of foreign investment was in the pipeline for the industry. However, the unstable and erratic tax environment surrounding the sector has dampened investor sentiments. This decision will impact the whole start-up sector, not just the gaming industry. This will decision from the Council will discourage foreign investors from venturing into Indian start-ups fearing uncertainty surrounding the tax laws." 

Atishi added that the online gaming sector is considered the sunrise sector in the Indian start-up industry as it is the biggest growing sector on the start-up scene. "It is not a luxury industry as it engages people from Tier-II and Tier-III cities who play various games like ludo, chess, etc., for their entertainment," she stated. 

This decision will not only affect investors but also discourage the Indian youth from venturing into entrepreneurship, the minister said. "If the youth of our country get afraid of venturing into start-ups, where will the next Paytm, Flipkart, BharatPe, Zomato, and Oyo come from? It is necessary to withdraw such notices as these kinds of notices will end the industry. And I will raise this issue in today’s GST council meeting," Atishi noted.

The GST Council is set to meet on Saturday. It will be chaired by the Union Finance Minister and comprise the state ministers.