Nirmala Sitharman: More than 120 gaming firms have written a letter to Ministry of Finance warning that the new 28% introduced on online games will hamper with the foreign investment and will also put already issued ‘$2.5 billion investment at risk.” The government has said that the monetary sums that online gaming firms charge from their customers will be taxed. The letter written on July 14 urges the Ministry of Finance to reconsider its decision by briefing the impact on jobs and investments that it could have.
‘Social evil’
In the recent years, fantasy games have become very popular in India with a year-wide and a large user base. Fantasy cricket in particular has become very popular with a revenue rise of 24% during the Indian Premier League(IPL) this year. As per Federal Revenue Secretary Sanjay Malhotra the government believes that the tax will serve an array of social as well as economic issues. The popularity of fantasy games have raised concerns about the issue of addiction among Indian youth. ‘Online gaming platforms are viewed as a “social evil” by many Indian ministries’, added Sanjay Malhotra.
Fantasy games in India
Fantasy games especially pertaining to cricket has become widely popular throughout the nation. A total of 6.1 crore users participated in fantasy games during the IPL this year, generating a revenue of more than $342 million. Tiger Global and Peak XV are one the leading investors in the fantasy games. Fantasy apps such as Dream 11 and Mobile Premier League (MPL) are rather popular with significant investment from many firms. The fantasy cricket an be played from a starting sum of 8 rupees only.
The gaming companies have urged that right now industry is experiencing a steady rise and the heavy tax will discourage both foreign and domestic investments worth billions of dollars in the industry.
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