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Online sports platform Mobile Premier League has laid off around 350 people or about half of India team to cut down on expenses and bear the burden of increased GST of 28 per cent, according to an internal company email.
The GST Council has decided to levy a 28 per cent GST on online gaming and casinos on the face value of bets at the entry level.
The Centre will bring amendments to the Central GST law in the ongoing monsoon session of Parliament, following which states will pass the amendments in their respective assemblies to pave the way for the introduction of changes in the law by October 1.
MPL co-founder Sai Srinivas in an email to employees said that it was confirmed last week that a 28 per cent GST will be levied on the full deposit value rather than on Gross Gaming Revenue.
"The new rules will increase our tax burden by as much as 350-400 per cent.
"As a business, one can prepare for a 50 per cent or even a 100 per cent increase, but adjusting to a sudden increase of this magnitude means we need to make some very tough decisions," Srinivas said.
He said that as a digital company, our variable costs predominantly involve people, server and office infrastructure.
"Therefore, we must take steps to bring these expenses down in order to survive and to ensure that the business remains viable.
"We have already initiated work on revisiting our server and office infrastructure costs.
"However, despite this, we will still have to reduce our people-related costs.
"Regrettably, we will have to let go of around 350 of you.
"This has been a heart-wrenching process because it impacts a lot of our friends and colleagues," Srinivas said.
An email query sent to MPL did not elicit any reply.