Bengaluru, June 21: The Indian online gaming companies has reportedly taken a hit in their profit margin and laid off employees due to the GST hike. Online gaming companies in India reportedly saw a decline in their profits, and a majority of these firms said that their share of GST outgo had been 50-100% of their revenues. A report said that this information was obtained by a survey conducted by USISPF (US-India Strategic Partnership Forum) during April-May 2024. 

Deccan Herald reported that USISPF conducted the survey and that 12 companies at different stages of operations were considered. The report highlighted that three of these Indian companies, in terms of share of GST in total revenue, had paid 100% of the revenue and witnessed negative net deposits. On the other hand, five companies reported revenue growth despite the GST implementation on October 1, 2023, on gaming, gambling horse racing, betting, etc. Zerodha Kite Down Again: Nithin Kamath-Run Brokerage Firm’s Kite App Faces Technical Glitch, Users Complain on X, Share Funny Memes.

According to the report, seven companies showed stagnant revenue or a reduction in the top line. The two companies witnessed up to 50% fall in their revenues. The report highlighted that the centre had raised the GST rate on these activities to 28% following the GST council's recommendations. It also mentioned that it was charged on the total money deposited with any betting or gaming platform. Previously, this rate was 18% and was levied on gross gaming revenue on these platforms' fees. 

According to the report, the decline in the profit margin was due to the increase in the GST, which caused companies to implement layoffs, shut down operations, and resort to no-hiring. Since January 2023, only two companies have been able to raise funding, compared to the $5,00,000 to $400 million raised until December 2022. YouTube Premium Cancellation: Google-Owned Video Platform Starts Cancelling Premium Subscriptions Bought Cheaper in Different Country Using VPN.

The survey said that the majority of the companies recommended amending the GST valuation mechanism to the 'net deposit' model, while others advised reducing total withdrawals from total deposits for Goods and Service Tax.

(The above story first appeared on LatestLY on Jun 21, 2024 01:57 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).