online gaming investors letter: Tiger Global, Peak XV, other egaming investors write to PM Modi on 28% GST, seek meeting

A group of 30 Indian and foreign investors backing online gaming companies has written a letter to Prime Minister Narendra Modi saying that the current proposal of imposing 28% goods and services tax (GST) on the full face value of online gaming transactions “will set up the most onerous tax regime for the gaming sector globally, which will lead to a potential write-off of the $2.5 billion capital invested in this sector”.

ET had reported exclusively that investors were planning to write to the government flagging their concerns over the GST Council’s decision. Investors that have signed the letter include Peak XV Partners (formerly Sequoia Capital India), Tiger Global Management, DST Global, ChrysCapital, Kalaari Capital and Alpha Wave Global. Bennett, Coleman & Company Limited, which publishes ET, is also a signatory to the letter.

The investors have also sought a meeting with Prime Minister Modi or officials at the Prime Minister’s Office to elaborate their concerns.

The letter put forth global examples of countries such as the UK, the US and France to suggest how the levy on the full face value has led to “destruction of the sector”, including several startups.

“We submit most humbly, that this deleterious impact on the industry is expected to result in loss of over 50,000 high skilled jobs and a further loss of livelihood opportunity for over one million Indian citizens who are indirectly associated with this industry,” it added.

The investors also pointed out that the GST Council’s decision has an “unintended consequence of equating the constitutionally protected legitimate online skill gaming industry with gambling, betting and other games of chance”.

Stay on top of technology and startup news that matters. Subscribe to our daily newsletter for the latest and must-read tech news, delivered straight to your inbox.