Centre may reconsider retrospective GST notices to online gaming companies
Indian government might reconsider its position on the Goods and Services Tax (GST) levied on online real money gaming companies. Per CNBC, the government acknowledges a potential threat to these companies' survival if they are required to pay retrospective GST demands from July 2017 to March 2023. In 2022-23 and the first seven months of 2023-24, online gaming companies received 71 show-cause notices involving GST evasion worth Rs. 1.12 lakh crore.
Tussle between government and companies
The dispute between online gaming firms and the government revolves around the payment of 28% GST instead of 18% for the period leading up to October 1, 2023. Companies argue that the 28% tax rate should only apply from October 1, 2023. However, the government contends that the October 1 revision simply clarified an existing law and that the tax demand is not retrospective.
Ongoing tussle over GST rates and court cases
In summary, the Indian government may ease its stance on retroactive GST demands for online gaming companies, recognizing the potential impact on their survival. The dispute centers on whether a 28% GST rate should apply before October 1, 2023, with the matter currently being heard in the Supreme Court. The apex court is already hearing a case in which the Centre has challenged a Karnataka High Court order that nullified a Rs. 21,000 crore GST demand on Gameskraft.
