Online gaming platforms face Rs. 45,000cr retrospective tax liability
Online skill-based gaming platforms in India are facing a potential tax demand of Rs. 45,000 crore. The Central Board of Indirect Taxes and Customs (CBIC) has discovered that these entities have underpaid taxes since 2017, paying only 18% tax on gross gaming revenue instead of the prescribed 28%, the Economic Times reported. A senior CBIC official has disclosed that the gaming industry's underpayment amounts to Rs. 45,000 crore since GST implementation.
The actual tax liability since 2017 is Rs. 50,000cr
Since 2017, the online gaming industry has paid less than Rs. 5,000 crore in GST. The actual tax liability is estimated to be over Rs. 50,000 crore. This figure includes offshore gaming companies that have evaded more than Rs. 12,000 crore in taxes and the Rs. 21,000 crore demand issued to Gameskraft. Recently, the Centre filed a special leave petition in the Supreme Court against the Karnataka High Court order that quashed the tax demand notice against Gameskraft.
Skill-based platforms come under 28% GST slab
The latest CGST amendment has clarified the GST liability of online gaming companies. It states that every online money gaming company will be subject to a 28% GST and must pay the balance tax. On July 11, the GST Council amended the GST laws to clarify that there will be no difference between skill-based or chance-based games. It is unclear whether the companies will be taxed from July 1, 2017 or July 11, 2023.
