GST Notices Worth Rs.1 Lakh Crore Issued To Online Gaming Firms For Evading Tax

GST Notices Worth Rs.1 Lakh Crore Issued To Online Gaming Firms For Evading Tax

The Ministry of Finance notified 1 October as the date for implementing the 28 percent rate on gaming portals, casinos, and horse racing

The Goods and Services Tax (GST) authorities have issued show-cause notices to online gaming companies demanding Rs.1 lakh crore for evading tax.

Delta Corp received the notice for a short payment of tax worth Rs.6,384 crore, which followed the Rs.16,800 crore notice sent to the company in September.

Other gaming companies served with show-cause notices for shortfalls in GST payments include Dream11 and GamesKraft. They were directed to pay up to Rs.21,000 crores.

The Central government also apprised the states that the GST on online gaming companies was not being levied retrospectively since some games involved in betting were already being charged a 28 percent GST under the law. This was clarified, as some states including Goa claimed that the 28 percent GST on online gaming companies was being levied retrospectively.

Earlier, several online gaming companies were issued show-cause notices for allegedly evading GST with cumulative amounts adding up to Rs.55,000 crores.

They termed it retrospective taxation, claiming that the notices pertained to the period before 1 October, the implementation date for a new tax treatment for gaming platforms.

In response to a query, Sanjay Malhotra, the Revenue Secretary stated, "Certain members were informed that it was not retrospective, and this was the law earlier. The liabilities already existed because online money games are played with bets. They were already attracting 28 percent GST for betting or gambling.”

Meanwhile, T.S. Singh Deo, the Deputy Chief Minister of Chhattisgarh also said that the council discussed the issue of retrospectively taxing online gaming under the indirect tax regime with the dues being demanded from some firms exceeding their turnover.