A consortium of Indian and foreign investors supporting the booming online gaming industry has penned a letter to Prime Minister Narendra Modi expressing their concerns over the proposed 28% Goods and Services Tax (GST) on the full face value of gaming transactions.

They assert that this drastic measure will impose an excessively burdensome tax regime, potentially leading to a staggering write-off of the $2.5 billion in capital invested in the sector.

Citing examples from countries like the UK, the US, and France, where similar levies resulted in the decimation of gaming industries, including several promising startups, the investors warn against adopting a similar approach in India.

They emphasise that the imposition of such a high GST rate would inevitably lead to the loss of over 50,000 highly skilled jobs and threaten the livelihoods of over a million Indian citizens indirectly involved in the gaming industry.

The letter, signed by prominent investors, requests an audience with Prime Minister Modi or officials from the PM's Office to elaborate on their concerns.

One of the key points highlighted in the letter is that the GST Council's decision unintentionally equates the legitimate online skill gaming industry with gambling, betting, and games of chance. The investors argue that this mischaracterization could undermine the thriving sector's credibility and potential for further growth.

The gaming industry has been a significant contributor to India's economic landscape, fostering technological innovation and creating employment opportunities for skilled individuals.

The investors urge the government to reconsider the proposed GST rate and work towards creating a tax structure that fosters growth, innovation, and job creation while ensuring that the sector maintains its integrity and legal status as a skill-based industry.