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This and more in today’s ETtech Top 5.
Also in this letter:
■ Twitter’s new row with ’government-funded media’ labels
■ Infographic insight: TikTok’s popularity among adults
■ India has potential to be world’s gaming nation: Nazara Tech CEO
Group of ministers likely to propose 18% GST for games of skill, 28% for chance
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Days after the IT ministry notified the final rules for online gaming, the Group of Ministers (GoM) set up to review goods and services tax (GST) on online gaming, casinos, and horse racing is likely to stay with the 18% tax on gross gaming revenue (GGR).
However, the Meghalaya chief minister Conrad Sangma-headed group might recommend the highest rate of 28% GST on betting, casinos, and horse racing, drawing a distinction between games of skill and games of chance.
Jargon buster: GGR is the fee charged by an online skill gaming platform as service charges to facilitate the participation of players in a game on their platform.
Tell me more: The GoM is expected to freeze its recommendations only after introducing the IT Intermediary Amendment Rules, 2023. The GST council will take the final decision on the levy at its next meeting, likely in the last week of May or the first week of June.
Currently, online gaming, which does not involve betting, attracts 18% GST on GRR. Earlier, the GoM had recommended a 28% GST on GGR, irrespective of whether it was a game of chance or skill.
Why the change? “There have been significant developments since the report was submitted, so there will be a relook at the recommendation,” a person aware of the development told us.
The change in stance follows the Finance Act, 2023, which has recognised the online gaming industry as a new-age industry, distinguishing it from gambling and betting.
Winnings to be taxed: The Act also imposed a 30% tax deducted at source (TDS) on ’net winnings’ from online games in the ’user account’ at the end of the concerned financial year, the onus of which will be on the gaming company.
Mumbai Apple Store to be no-go zone for competing brands
Before the launch of its first retail store in India, tech giant Apple set its demands in stone. About two dozen technology, electronics, and ecommerce brands will not have any kind of presence near its store at the Reliance Jio World Drive mall in Mumbai.
Do not disturb: According to the lease agreement accessed by data analytic firm CRE Matrix, the company has specified a slew of brands, including Amazon, Facebook, Google, LG, Microsoft, Sony and Twitter, that should be kept out of its “exclusive zone”. This will include stores, hoardings, and advertisements.
Other brands cited are Bose, Dell, Devialet, Foxconn, Garmin, Hitachi, HP, HTC, IBM, Intel, Lenovo, Nest, Panasonic and Toshiba.
Expert take: “Anchor stores can understandably ask for certain exclusions with competing brands, which landlords usually agree to provide, whether as an informal understanding or as part of the documented agreement. But it is unusual to have a long list of companies that may not be direct competitors across the entire product range,” said Devangshu Dutta, founder of retail consulting firm Third Eyesight.
Tim Cook to fly in: We reported on April 6 that Apple chief executive Tim Cook is likely to visit India for the launch of the store and also to discuss strategic issues such as manufacturing expansion and exports from India with key ministers.
If the visit does take place, it could possibly include a meeting with Prime Minister Narendra Modi, said the people.
Twitter sparks fresh row with ’government-funded media’ labels
“What does BBC stand for again? I keep forgetting,” Twitter CEO Elon Musk tweeted on Monday after an uproar over the social media platform’s decision to label the British Broadcasting Corporation (BBC) as a “government-funded media” organisation. The UK-based broadcaster has reached out to Twitter for clarification.
‘Government-funded media are biased’: Musk’s social media network has also applied a similar label to the US radio network NPR. It was marked as “state-affiliated media” and later changed to “government-funded”.
“We need to add more granularity to editorial influence, as it varies greatly. I don’t actually think the BBC is as biased as some other government-funded media, but it is silly of the BBC to claim zero influence,” the Twitter CEO posted. “Minor government influence in their case would be accurate,” he added.
Crackdown on media: The microblogging platform’s move against NPR and BBC came just days after it stripped The New York Times, which Musk has accused of being biased, of its verified status.
The Times later said it would not pay a monthly fee to get a verified checkmark on Twitter.
Musk has for years expressed a deep disdain for the news media and in recent weeks installed an automatic response of a poop emoji to emails sent to the site’s main press address.
Tweet of the day
Infographic insight: TikTok’s popularity among adults
The United States and Indonesia have the highest number of adults on Tiktok at 113.3 million and 109.9 million, respectively. This is at a time when the Bytedance-owned tech firm has been caught in a legal and regulatory battle in the US as a large number of senators and policymakers have called for a blanket ban on the short-video platform.
Several nations have either completely banned TikTok or asked federal employees to uninstall the app from their phones.
According to a report from Statista and DataReporta, Brazil, Mexico and Russia are the other three nations in the top five in terms of app usage by adults, with 82.2 million, 57.5 million, and 54.9 million users, respectively.
India has potential to be gaming nation of the world: Nazara Tech CEO
Nitish Mittersain, cofounder and CEO of gaming firm Nazara Technologies, said that the company is looking at attractive acquisitions to scale the business as well as potentially increase margins further
On new gaming rules: “I think what Rajeev Chandrasekhar released last week is a game-changing policy for the industry,” he said, adding that the “skill-based real money gaming space is ripe for take off and that Nazara is going to make very aggressive moves in this space now”.
Funding winter: According to Mittersain, the current funding environment is a “fantastic opportunity” for Nazara to invest in the right founders and acquire companies at a fair value.
“The current market sentiment is actually a very good opportunity for us. India is on a trajectory of growth in gaming,” he said.
On the company’s growth forecast: “As we enter FY24, we see all our businesses having strong growth trajectories, so organic growth will continue to be very healthy and we will also additionally acquire new businesses that can kick in faster … growth in the years to come,” said Mittersain, who returned as the CEO of Nazara Technologies following the exit of Manish Agarwal in October.
Today’s ETtech Top 5 newsletter was curated by Gaurab Dasgupta in New Delhi and Megha Mishra in Mumbai. Graphics and illustrations by Rahul Awasthi.81123209
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