Winning Bizness Desk

Mumbai. In a major effort to curb the tax evasion, show cause notices worth Rs 1 lakh crore have been issued to online gaming companies in the case of GST evasion. A senior official, while giving the information, said that many companies have been issued notices for tax dues up to 10 times their total revenue. This matter is related to GST on the services of online gaming companies for a period of time, on which GST is being charged at the rate of 28 percent instead of 18 percent. GST officials have sent show cause notices worth around Rs 1 lakh crore to several online gaming platforms like Dream11 and casino operators like Delta Corp for alleged non-payment of taxes in full, the official said. Additionally, gaming platform Gamescraft was sent a show cause notice in September last year for alleged GST evasion of Rs 21,000 crore. However, the Karnataka High Court had ruled in favor of the company. After this, the Central Government filed a Special Leave Petition (SLP) in the Supreme Court in July against the decision of the High Court.

Foreign gaming companies data not available

The official said that no data of foreign gaming companies registered in India after October 1 were available. The government has amended the GST law, making it mandatory for foreign online gaming companies to register in India from October 1. In fact, the GST Council had clarified in August 2023 that 28 percent GST will be imposed on the full value of bets placed on online gaming platforms from October 1, 2023. Companies say that GST should be imposed on these at the rate of 18 percent only. Apart from this, this matter also pertains to the period till October 1, 2023. There is a tussle going on between GST officials and online gaming companies regarding both these matters. Online gaming companies say that the provision of GST at the rate of 28 percent is applicable from October 1. At the same time, the government argues that the provision of change which is applicable from October 1 is only to clarify the already existing rule. Therefore, online gaming companies will have to pay 28 percent GST even on bets made before October 1.

Delta Corp termed the tax demand as arbitrary

GST officials have recently sent tax payment notices to two online gaming companies Dream11 and Delta Corp. Show cause notice has been sent to Dream11 for Rs 28,000 crore and Play Game 24/7 for Rs 20,000 crore. Apart from this, the country's only listed gaming company Delta Corp has received a tax payment notice of Rs 6,384 crore from the GST department. With this, the total tax demand on the company has increased to Rs 23,000 crore. However, Delta Corp had termed the tax demand as arbitrary.