28% GST impact: Mobile Premier League lays off 350 employees

The announcement of higher tax rates for online gaming had the industry anticipating a significant financial burden. This move has already led to layoffs, starting with MPL.

By  Storyboard18Aug 9, 2023 10:28 AM
28% GST impact: Mobile Premier League lays off 350 employees
On July 11, the GST Council introduced 28 percent percent GST on online gaming irrespective of whether they were games of skill or games of chance. (Representative Image: Tarik Haiga via Unsplash)

Online real money gaming company Mobile Premier League (MPL) which is backed by Peak XV Partners is laying off 350 of its employees.

As per media reports, the co-founder and chief executive of MPL, Sai Srinivas mentioned that the implementation of 28 percent GST will pave the way for the increase in tax burden by as much as 350 percent - 400 percent.

Srinivas in the email further highlighted that despite having initiated on bringing down their server and office infrastructure costs, letting go of their 350 employees was necessary in order to bring down their people costs.

On July 11, the GST Council introduced 28 percent percent GST on online gaming irrespective of whether they were games of skill or games of chance. This was met with discernment and opposition from the gaming industry where the online gamers association ‘Indian Gamers United’ sent an open letter to the finance minister Nirmala Sitharaman.

The association which represents gamers from Tier 2 and Tier 3 cities requested the Minister to bring a distinction between games of skill and games of chance. The letter further stated that the 28 percent GST move could push the gamers to depend on offshore platforms which requires no tax.

However, on August 2, Sitharaman confirmed that 28 percent GST would be levied on online gaming. She went on to clarify that with respect to online gaming and casinos, the tax would be levied at the entry level or face value, and not on every bet or the amount won from the game which would result in repetitive taxing.


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First Published on Aug 9, 2023 8:42 AM

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