| |JULY 20238TECH MINTOnline gaming companies' plans to levying of 28 percent GST will limit their ability to invest in new games, impact cash flows as well as business expansion. The GST Council has agreed to impose a 28 percent tax on online gaming, casinos and horse racing. The tax would be levied on the full face value.The All India Gaming Federation (AIGF), which represents companies like Nazara, GamesKraft, Zupee and Winzo, said the decision by the council is unconstitutional, irrational, and egregious."The decision ignores over 60 years of settled legal jurisprudence and lumps online skill gaming with gambling activities. This decision will wipe out the entire Indian gaming industry and lead to lakhs of job losses and the only people benefitting from this will be anti-national illegal offshore platforms", says AIGF CEO Roland Landers.Landers says, when the central government has been supporting the industry, it is unfortunate that such a legally untenable decision has been taken, ignoring the views of most GoM states who studied this matter in detail.Online gaming players have repeatedly urged the government and the GST Council to levy 18 percent GST on their segment instead of 28 percent that was recommended by Group of Ministers (GoM)."The implementation of a 28 percent tax rate will bring significant challenges to the gaming industry. This higher tax burden will impact companies' cash flows, limiting their ability to invest in innovation, research, and business expansion," IndiaPlays COO Aaditya Shah says.According to reports, the skill-based games and apps engaged in betting or casinos should not be treated in the same manner. Microsoft overcame significant obstacles in its attempt to acquire video-game developer Activision Blizzard after a US judge approved the $69 billion transaction and a British regulator said it would rethink its stance.As the US and Britain blocked what would have been Microsoft's largest merger ever and the largest transaction in the history of the video-game industry, Activision shares rose 10 percent on the day. Shares of Microsoft increased 64 cents to $332.47.The Biden administration claimed that the agreement would harm consumers by giving Xbox game console-maker Microsoft exclusive access to games like the best-selling `Call of Duty', but US District Judge Jacqueline Scott Corley in San Francisco dismissed this claim."The FTC has not shown it is likely to succeed on its assertion the combined firm will probably pull Call of Duty from Sony PlayStation, or that its ownership of Activision content will substantially lessen competition in the video game library subscription and cloud gaming markets," she wrote.The Federal Trade Commission (FTC) of the US had suggested that Microsoft would be able to utilize the Activision games to marginalize competing console manufacturers like Nintendo and market leader Sony Group."The various testimonies that have surfaced during the U.S. trial all weaken the UK's antitrust watchdog's arguments," said Joost Van Dreunen, a lecturer at New York University's Stern School of Business."The FTC has not shown it is likely to succeed on its assertion the combined firm will probably pull Call of Duty from Sony PlayStation, or that its ownership of Activision content will substantially lessen competition in the video game library subscription and cloud gaming markets," she wrote.The British Competition and Markets Authority (CMA) announced it was ready to hear Microsoft's suggestions to address antitrust concerns in the UK shortly after the American judge's ruling, raising the possibility that the two parties may reach an agreement.The Federal Trade Commission (FTC) of the US had suggested that Microsoft would be able to utilize the Activision games to marginalize competing console manufacturers like Nintendo and market leader Sony Group.According to a PwC prediction, gaming market sales will rise by 36 percent to $321 billion over the following four years. GST COUNCIL TO IMPOSE A 28 PERCENT TAX ON ONLINE GAMING, CASINOS & HORSE RACINGUS JUDGE APPROVES MICROSOFT'S $69 BILLION ACTIVISION BLIZZARD DEAL
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