New Delhi:-  The Indian government's decision to impose a 28% tax on online gambling poses an "existence threat" to the burgeoning industry and could herald its demise, experts say. Stocks of Indian online gaming platforms and casinos fell after the GST (Goods and Services Tax) board decision.

More than 900 gaming startups in the country paid a small tax on the fees they provided for their games. However, having 28% of his GST charged on the full face value of gambling transactions means that the full amount collected by the player is subject to taxation.

According to industry estimates, the total tax revenue on player winnings, including GST, platform fees, and income tax, will exceed 50% after the new law comes into effect. In fact, for every $100 (£76.8) a player spends, there is a $5-15 commission from the gaming platform and a 30% withholding tax (TDS), plus a $28 "sunk cost" as GST.) applies to all prizes drawn. 

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Sudipta Bhattacharjee, a partner at commercial law firm Khaitan & Co., said this would "disincentivize players from participating and create a world where VAT and GST are levied at average rates and only platform fees and commissions are taxed." It's completely against the norm," he said.

“This move has completely taken the industry by surprise. It will shake investor confidence and usher in a fundraising winter,” Bhattacharjee added.

The Indian online gaming industry has experienced a huge boom in the last five years, with an average annual growth rate of the 28-30%. Thanks to affordable smartphones and easy access to cheap mobile data, the sector has attracted US$2.5 billion, including foreign direct investment from companies such as Tiger Global. 

But according to Soham Tucker, founder, and CEO of esports tournament company GamerJi, the GST council's decision is at "multiple levels" including user base, revenue, and investor sentiment. Its growth rate is now in question as it affects startups, he said.

"To limit the impact on the investor side, many game companies may decide to move their operations out of India," Tucker added.

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"They destroyed a multi-billion dollar industry in one fell swoop, and at the same time, this decision could give a huge boost to illegal and illicit operators in the country," said Gauraf, promoter of poker site PokerHigh. He said Mr. Gagger.

The All India Gaming Federation called the decision "unconstitutional, unreasonable and outrageous" and said the government had confused online skill games with gambling practices and ignored "established case law" for more than 60 years. 

Gambling, which is considered gambling, is illegal and frowned upon in many states of India. However, most states allow online games that are considered skill-based.

Industry groups expect hundreds of thousands of jobs to be lost in the online gaming industry as a result of the move. Indian gaming startups currently employ 50,000 people and are expected to create another 350,000 direct jobs and 10 million indirect jobs by 2028.

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Many of the gambling companies interviewed by the BBC said there was a lack of consistency behind the ruling. All India Gaming Federation CEO Roland Landers said in a statement: "It is very disappointing that despite the government's support for the industry, a decision that is legally untenable has been taken." rice field. "It would be disastrous for the prime minister's dream of a trillion-dollar digital economy."

Indian Prime Minister Narendra Modi has repeatedly praised the gaming industry as an emerging sector with the potential to create jobs and contribute to global markets. "This kind of outrageous tax regime is inconsistent with this move and it will take a multi-layered advocacy campaign to withdraw the proposal," Bhattacharjee said.

He expects the gaming industry to unite and face strong legal challenges as federal and state governments implement changes to tax laws. But India's finance minister said the move was a "unanimous" decision and would not be considered or overturned. 

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The Gaming Industry will now get shocked that the Indian Government has got a new rule which will impose the industries a tax rate of 28% on the full face value of the company share. The gaming industry was informed by the Prime Minister to create jobs and other employment opportunities for the Global market