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Mobile Premier League, the Bengaluru-based online real money gaming firm, has reportedly fired 350 of its staff as part of its cost-cutting exercise due new Goods and Services Tax (GST) law that imposes a 28% tax on the gaming sector.
On August 8, MPL co-founder and CEO Sai Srinivas wrote an email, saying that the company has to lay off 350 employees to reduce its people-related costs. Srinivas blamed the new GST law, which he said will increase the company's tax burden by 350-400%. "As a business, one can prepare for a 50% or even 100% increase, but adjusting to a sudden increase of this magnitude means we need to make some very tough decisions," wrote Srinivas.
The GST Council on July 11 announced the decision to impose a 28% tax on online gaming, which came as a rude shock to the gaming industry.
The Council decided to amend central and state laws from October 1 to implement a 28% tax on online gaming, casinos and horse racing. The tax will be applied not to each value of the bets placed but to the entry amount that users pay.