The online gaming industry is again under fire amid reports of at least six online gaming companies being served multiple Goods and Services Tax (GST) evasion notices and ex-cause notices by the Directorate General of Goods and Services Tax Intelligence (DGGI). On 26 September.
Sources told CNBC-TV18 that the biggest tax notice in the industry has been given to fantasy gaming company Dream 11. Its parent company Sporta Technologies Private Limited has filed a writ petition in the Bombay High Court, challenging the show cause notice issued against it. Alleged failure to pay 28 per cent GST on the face value of stakes collected.
Intimation of tax payable through DRC-01A form has been issued to these online gaming companies by the authorities. Industry sources suggest the industry-wide tax liability could exceed Rs 1 lakh crore.
He said most of the notices would be distributed by the end of September. In cases where information notices have been sent, DGGI has asked the companies to clarify their stand before sending the final notices.
It is to be noted that this comes after the Supreme Court earlier this month stayed the Karnataka High Court’s decision, whereby it had quashed the show cause notice issued by the DGGI, demanding Rs 21,000 crore penalty to GamesCraft. Instructions were given to pay additional GST. Experts suggest that this moratorium allows the Finance Ministry to send similar notices to other companies as well.
Dream 11 has declined to comment on the matter.
With inputs from Shruti Malhotra and Parikshit Luthra
(Edited by: Kanishka Sarkar)
First Published: September 26, 2023 1:57 PM IST