Dream 11 Withdraws Plea in Bombay High Court Against GST Notices For Alleged Tax Evasion
Dream 11 Withdraws Plea in Bombay High Court Against GST Notices For Alleged Tax Evasion
The matter will be heard after six weeks
Fantasy sports platform Dream 11 has withdrawn its plea before the Bombay High Court, which had challenged the show-cause notices issued by the tax authorities. The notices were for the alleged evasion of the Goods and Services Tax (GST) of over Rs.1,200 crores, excluding the interest and penalty.
The notices alleged that Dream 11 evaded paying the 28 percent GST levied for providing gambling services to users during the financial years 2017-2018 and 2018-2019.
The company had challenged the notices before the high Court.
The additional government pleader Jyoti Chavan informed the Court that the Deputy Commissioner of the State Tax Department had withdrawn the show-cause notice. Chavan apprised that the Directorate General of the GST would instead send a fresh show-cause notice.
Thereafter, the petition was withdrawn by Dream 11.
A similar plea had been filed by another online gaming company, Playerzpot Media after notices were issued to it demanding Rs.532 crores as GST with interest and penalty.
Filed through Khaitan & Co, Playerz argued that the notices gave retrospective effect to amendments to the GST Act that fixed a tax on online fantasy sports services at the rate of 28 percent. However, the amendment was effective from 01 October 2023, and couldn’t have been applied retrospectively.
Playerz challenged Section 15(5) of the Central Goods and Services Tax (CGST) claiming that it was arbitrary, as it suffered from excessive delegation. Section 15(5) gave power to officers to fix the value of supplies for taxation purposes on the recommendation of the GST Council.
While ruling on the case, the bench of Justice GS Kulkarni and Justice Jitendra Jain issued a notice to Attorney General R Venkataramani regarding the challenge to the constitutional validity of Section 15(5).
Appearing for the DGGST, advocate Jitendra Mishra assured the Court that the department would not pass any orders on the demand notices, provided the petitioners participated in the proceedings.
