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NEW DELHI: GST authorities have issued show cause notices worth Rs 1 lakh crore to online gaming companies for tax evasion so far, a senior official said on Wednesday.
The official, however, said there is no data yet of foreign gaming companies registering in India since October 1.
The government has amended the GST law, making it mandatory for overseas online gaming companies to register in India from October 1.
In August, the GST Council clarified that 28 per cent Goods and Services Tax (GST) would be levied on the full value of bets placed on online gaming platforms.
Since then, a host of gaming companies have received either an intimation notice or a show cause notice for short payment of GST.
“Online gaming companies served notices worth about Rs 1 lakh crore by GST authorities so far,” the official said.
While gaming company Dream11 is reported to have received a show cause notice for evasion of Rs 40,000 crore, casino operators and gaming platform providers, like Delta Corp, have received notices from GST authorities in two instalments totalling Rs 23,000 crore for short-payment of taxes.
Online gaming companies have been approaching the High Courts against such GST demands, contesting the claims of revenue authorities. The online gaming companies claim they were paying taxes at the rate of 18 per cent as the games played on the platform were ‘games of skill’.
Delta Corp had approached the Bombay High Court challenging the GST demands.
The High Court of Bombay at Goa considered the writ petitions filed by the company and its subsidiaries on October 23, 2023, Delta Corp said in a regulatory filing on October 24.
“Basis a statement made on behalf of the concerned tax authorities, the…High Court has directed such authorities not to pass any final orders on the captioned show cause notices without the prior permission of the…High Court,” Delta Corp said.
Separately, a show cause notice was sent to GamesKraft in September last year for alleged GST evasion of Rs 21,000 crore.
While the Karnataka High Court has ruled in favour of the company, the central government in July filed a Special Leave Petition (SLP) in the Supreme Court.
The official, however, said there is no data yet of foreign gaming companies registering in India since October 1.
The government has amended the GST law, making it mandatory for overseas online gaming companies to register in India from October 1.
In August, the GST Council clarified that 28 per cent Goods and Services Tax (GST) would be levied on the full value of bets placed on online gaming platforms.
Since then, a host of gaming companies have received either an intimation notice or a show cause notice for short payment of GST.
“Online gaming companies served notices worth about Rs 1 lakh crore by GST authorities so far,” the official said.
While gaming company Dream11 is reported to have received a show cause notice for evasion of Rs 40,000 crore, casino operators and gaming platform providers, like Delta Corp, have received notices from GST authorities in two instalments totalling Rs 23,000 crore for short-payment of taxes.
Online gaming companies have been approaching the High Courts against such GST demands, contesting the claims of revenue authorities. The online gaming companies claim they were paying taxes at the rate of 18 per cent as the games played on the platform were ‘games of skill’.
Delta Corp had approached the Bombay High Court challenging the GST demands.
The High Court of Bombay at Goa considered the writ petitions filed by the company and its subsidiaries on October 23, 2023, Delta Corp said in a regulatory filing on October 24.
“Basis a statement made on behalf of the concerned tax authorities, the…High Court has directed such authorities not to pass any final orders on the captioned show cause notices without the prior permission of the…High Court,” Delta Corp said.
Separately, a show cause notice was sent to GamesKraft in September last year for alleged GST evasion of Rs 21,000 crore.
While the Karnataka High Court has ruled in favour of the company, the central government in July filed a Special Leave Petition (SLP) in the Supreme Court.
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