The Supreme Court ( SC ) granted online gaming companies a significant reprieve by halting the issuance of Rs 1.12 lakh crore in GST show-cause letters against them. Until the case is decided definitively, the court has halted all more actions under these notices.
As per the report in new Indian express.com, on Wednesday, the court consented to consider these companies’ petition against the GST department‘s actions regarding the notices they received. The warnings were sent in response to these companies’ alleged tax avoidance. Nonetheless, the businesses had filed a lawsuit to overturn the letters contesting the tax demand.
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The counsel Abhishek Rastogi claimed that this stay protects revenue authorities’ interests while also giving gambling companies an instant reprieve from possible coercive action. Rastogi, who represents some of the gambling companies, remarks, “By halting proceedings, the court ensures that the demands don’t become time-barred during the course of litigation, preserving scope for legal clarity without procedural hindrance.”
Based on the notices, these companies had filed a lawsuit to stop tax authorities’ recovery proceedings. They contended that because the GST demands are controversial, such measures would affect their business operations. “These concerns are addressed and a fair hearing is ensured by the court’s intervention,” Rastogi argued.
The next hearing is set for March 18, 2025, and the court has ordered the aggregation of cases involving a number of gambling organizations. According to tax experts, this gives the court a window of time to consider the major questions in this dispute and gives everyone a chance to make their cases.
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The stock of gaming firms Nazara Tech and Delta Corp. jumped as much as 15%. Shares of Narzara ended the day down 3.7%, while shares of Delta Corp. closed up 4.4%. Before the October 2023 change made it clear that 28% GST would be applied to the threshold deposit amount, the dispute centered on taxability.Prior to October 1, 2023, they paid 18% of their revenue rather than deposits. They contend that since many of these games require skill rather than luck, GST should only be applied to their platform fees or commission.
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