Online Gaming Companies Faces Rs. 1 Lakh Crore GST Show Cause Notices: Reports

Online Gaming Companies Faces - GST Show Cause Notices - Reports - TAXSCAN

As reported by Reuters, India’s Goods and Services Tax (GST) authorities have issued notices totaling ₹1 lakh crore to online gaming companies, alleging that these firms have engaged in tax evasion. An official from the government informed Reuters about this development. In August of this year, the GST authority implemented a 28% tax on online gaming companies, applying it to the total funds deposited for participating in online games.

The GST Council had in August clarified that 28 per cent GST would be levied on full value of bets placed on online gaming platforms. Notably, last week, Delta Corp, a prominent player in the gaming industry, received a GST notice for underpayment of taxes, amounting to ₹6,384 crore, resulting in an overall tax demand on the company exceeding ₹23,000 crore.

Furthermore, a separate show cause notice had been issued to GamesKraft back in September of the previous year, accusing them of evading GST payments totaling ₹21,000 crore. This latest development underscores the increasing scrutiny and tax-related challenges faced by online gaming companies in India.

The Supreme Court has issued a stay on the High Court of Karnataka’s Single Judge’s order, which had invalidated the 21,000 Crore Rupee GST Demand imposed on Gameskraft. This development, as reported, is expected to lead to the issuance of Show Cause Notices (SCN) to around 40 other online gaming companies. In fact, this is currently occurring.

Read More: Blowback to Gameskraft: Supreme Court stays Karnataka HC order quashing Rs. 21000 Cr Online Gaming GST Demand

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