A team of domestic and foreign investors in the Indian start-up ecosystem has approached the government to re-think its decision to leverage 28 per cent of goods and service tax (GST) on the Online Gaming sector. The list of investors includes key names like Peak XV, Tiger Global Management, Think Investments, Kotak Private Equity, Steadview Capital and others. 

In an open letter, the investors wrote that the GST council's decision has 'unintended consequences of equating the constitutionally protected legitimate online skill gaming industry with gambling, betting, and other “games of chance."

“We invested in this sector to make India the gaming capital of the world, which would help in generating, among other things, high-skilled jobs, billions in foreign capital and make the country a net exporter of innovation in gaming and allied areas such as animation, artificial intelligence, and visual effects," the letter added. 

The development came after 100 online gaming companies and industry associates urged the centre to revise the 28 per cent GST rate. These business bigwigs signed a letter and suggested the government come up with a viable and progressive GST regime. 

Earlier this month, a group of ministers (GoMs) decided to impose a 28 per cent GST on casinos, race courses and online gaming. Prior to that, these categories were subjected to an 18 per cent GST rate. 

"Online gaming, horse racing and casinos will be taxed at 28 per cent (all three activities) and they will be taxed on full face value," Finance Minister Nirmala Sitharaman said at a press conference in New Delhi.