Online gaming firms receive GST show cause notices worth ₹1 lakh crore

GST authorities have issued show cause notices worth a whopping Rs 1 lakh crore to online gaming companies, as per reports.

GST on online gaming firms

In August, the GST Council said that a 28% Goods and Services Tax (GST) would be applied to the full value of bets placed on online gaming platforms. And October 1st was notified as the date for implementation of the 28% GST rate for e-gaming, casinos, and horse racing.

Over the past month, several gaming companies in India have received tax notices from the government, including Dream11, Gameskraft and Delta Corp among others. Firms have challenged the restrospective nature of the tax notices, calling them unreasonable.

The GST authority also said that amendments to Integrated Goods and Services Tax would make it mandatory for offshore online gaming platforms to register in India and pay taxes in accordance with domestic law. However, as per reports, there is currently no data available regarding foreign gaming companies registering in India since October 1.

TAX NOTICES TO DELTA CORP

It may be noted that the Bombay High Court has directed the Directorate General of GST Intelligence, Hyderabad to not pass a final orders on ₹16,195 crore tax notice against Delta Corp without prior permission from the court, the gaming company said.

The order was passed by the Goa Bench of Bombay High Court.

The company and its arms have over ₹23,000 crore tax payment notice from DG GST, over six times more than its overall market capitalisation of ₹4,000 crore.