Online gaming companies served tax notices worth Rs. 1L crore
Online gaming companies have been slapped with show-cause notices amounting to Rs. 1 lakh crore by GST authorities over alleged tax evasion, reported Reuters, citing a high-ranking government official. The official, however, mentioned that there's no information available on foreign gaming companies registering in India since the compulsory registration requirement came into effect on October 1. In August, the GST Council clarified that a 28% GST would be imposed on the total value of bets made on online gaming platforms.
Dispute over 28% GST rate applicable before October 1
The government and online gaming companies are at odds over whether a 28% GST rate should apply before or after October 1, 2023. The government insists it's been in effect since August, while online gaming firms argue it applies starting from October 1, 2023. The dispute is linked to the GST Council's amendment in August, which made it clear that a 28% GST rate applies to all online games with bets, regardless of skill or chance.
Notable companies receiving show-cause notices
Notable online gaming and casino operators, such as Dream 11 and Delta Corp, were issued GST show-cause notices last month for alleged underpayment of taxes. In September of last year, GamesKraft also received a notice for purported GST evasion amounting to Rs. 21,000 crore. Although the Karnataka High Court ruled in favor of GamesKraft, the central government filed a Special Leave Petition (SLP) in the Supreme Court in July.
