Ashneer Grover had launched his own fantasy gaming named Crickpe in April this year.
Entrepreneur Ashneer Grover has slammed the move by the Goods and Services Tax (GST) Council to impose a 28 per cent tax on the turnover of online gaming companies. Mr Grover even said the move will murder the fantasy gaming industry adding that it's time for start-up founders to enter politics. Mr Grover had launched his own fantasy gaming named Crickpe in April this year, which allowed users to create a virtual team of cricketers based on their current form. Players earn points based on the cricketer's performance in real match.
"RIP - Real money gaming industry in India. If the govt is thinking people will put in Rs 100 to play on Rs 72 pot entry (28% Gross GST); and if they win Rs 54 (after platform fees)- they will pay 30% TDS on that - for which they will get free swimming pool in their living room come the first monsoon - not happening!" the BharatPe co-founder said in his tweet.
"It was good fun being part of the fantasy gaming industry - which stands murdered now. $10 Bn down the drain in this monsoon. Time for startups Founders to enter politics and be represented - or this is going to be spate industry after industry," he added.
Online gaming industry said that levying of 28 per cent GST will limit their ability to invest in new games, impact cash flows as well as business expansion.
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 $1.5 billion industry has surged in popularity in recent years and attracted foreign investment.
The gaming apps are endorsed by sporting heroes in India, where cricket is a national passion, but concerns have mounted over possible addiction and financial losses.
Dream11, which is the lead sponsor of India's national cricket team and is valued at $8 billion, is backed by Tiger Global. Peax XV - previously Sequoia Capital India - has invested in MPL app.
Union Finance Minister Nirmala Sitharaman said the decision to impose tax on the total amounts gaming companies collect was taken after consultation with states, and the intent was not to hurt the industry.
Meanwhile, Mr Grover and his wife Madhuri Jain Grover are currently in the midst of multiple court cases filed by BharatPe and its co-founders for an alleged Rs 81 crore fraud. Last month, the Delhi High Court refused to stay at this stage an investigation against Mr Grover and his wife.