According to an EY analysis, Ernst & Young (EY) and the US-India Strategic Partnership Forum (USISPF) jointly released a report that stated that the 28 percent GST on skill-based online games caused funding limits, decreased growth trajectories, job losses, and increased uncertainty throughout the industry. Ten out of the twelve organizations that were surveyed had substantial challenges in creating jobs. Four businesses stopped hiring but did not fire any workers, and three businesses let go of around half of their staff. One company terminated more than half of its employees, and another ceased operations.
In a sector that has added one million jobs and was predicted to add three times as many in the upcoming years, the research stated that "such job erosion is an alarming concern that reflects the adverse business impact of the GST amendment." According to the statement, the government's unfavourable views of the industry have made it difficult for businesses to find and retain talent. Only five of the 12 companies surveyed, according to the research, saw an increase in revenue. Just 15% of the companies' total revenue came from GST before October 23, yet seven out of twelve chose to take on the tax burden after that date.
Four businesses that chose not to pass the tax on to consumers saw an increase in their GST share of between 50 and 100 percent, while the GST costs of the other three early-stage businesses, whose net deposits are negative, increased by more than 100 percent of their income. According to media sources, the new GST regime, which went into effect on October 1, 2023, has caused a huge increase in enterprises' tax outflows, with certain corporations seeing increases of up to 350–400%. Instead of passing the increased tax burden on to customers, many businesses are already bearing it on their own to prevent any user base turnover.
Furthermore, as per the findings, four of the twelve companies were unable to secure funding and will exit the industry if taxes are not normalized. Three companies are running out of equity cash, and since it appears that they won't be able to raise money in the near future, they are searching for purchasers.Before October 1, 2023, one company was lucrative; nonetheless, it started to lose money. Two businesses that were very profitable prior to the tax law are now only turning a profit on a very narrow margin.
Adding to this, as per the analysis, 28% GST imposition resulted in job losses and a capital outflow from India's real-money gambling industry. According to a joint assessment by EY & USISPF, the 28 percent GST on skill-based online games caused financial constraints, shortened growth trajectories, job losses, and increased uncertainty throughout the industry.
Of the twelve businesses surveyed, ten encountered substantial barriers to hiring new staff. While one-third of the enterprises laid off roughly half of their workforce, four stopped hiring but did not terminate any workers. One company closed its doors, and another lay off more than half of its employees. In a sector that has added one million jobs and was predicted to add three times as many in the upcoming years, the research stated that "such job erosion is an alarming concern that reflects the adverse business impact of the GST amendment." According to the statement, the government's unfavorable views of the industry have made it difficult for businesses to find and retain talent.
Only five of the 12 companies surveyed, according to the research, saw an increase in revenue. Just 15% of the companies' total revenue came from GST before October 23, yet seven out of twelve chose to take on the tax burden after that date. Four businesses that chose not to pass the tax on to consumers saw an increase in their GST share of between 50 and 100 percent, while the GST costs of the other three early-stage businesses, whose net deposits are negative, increased by more than 100 percent of their income. According to media sources, the new GST regime, which went into effect on October 1, 2023, has caused a huge increase in enterprises' tax outflows, with certain corporations seeing increases of up to 350 - 400 percent.
Instead of passing the increased tax burden on to customers, many businesses are already bearing it on their own to prevent any user base turnover. According to the research, four of the twelve companies did not succeed in attracting capital and will leave the industry if taxes are not normalized. Three companies are running out of equity cash, and since it appears that they won't be able to raise money in the near future, they are searching for purchasers. Before October 1, 2023, one company was lucrative; nonetheless, it started to lose money. Two businesses that were very profitable prior to the tax law are now only turning a profit on a very narrow margin.
