The Goods and Services Tax (GST) authorities have issued show cause notices demanding as much as ₹1 lakh cr from online gaming companies for tax evasion so far, a senior official confirmed today. 

Gaming Companies taxed

Last week, Delta Corp received a GST notice for short payment of tax to the tune of ₹6,384 cr which came close on the heels of a ₹16,800 cr tax notice sent to the company in September.

Other gaming companies that were sent such show cause notices for shortfall in GST payments, include Dream11 and GamesKraft, which were asked to pay up ₹21,000 cr.

A number of online gaming companies were issued show-cause notices earlier for allegedly evading GST with cumulative amount adding up to ₹55,000 cr.

28% GST levied from Oct 1

Many have termed these show-cause notices as retrospective taxation claiming that the notices pertain to the period before the Oct 1 implementation date for a new tax treatment for gaming platforms.

The Union Finance Ministry had notified Oct 1 as the date for implementing the 28% GST rate on online gaming, casinos and horse racing.

The Central government has clarified to the states that the GST on online gaming companies is not being levied retrospectively since some online games involved in betting were already being charged a 28% GST under the law earlier.

The Centre made the clarification as some states such as Goa had claimed that the 28% GST on online gaming companies was being levied retrospectively.

“It was informed to certain members that this is not retrospective and this was the law earlier. These liabilities were already existing because money online games played with bets… they were already attracting by way of betting or gambling 28% GST,” said revenue secretary Sanjay Malhotra.

Chhattisgarh Deputy Chief Minister TS Singh Deo also said that the council discussed the issue of retrospectively taxing online gaming under the indirect tax regime with the dues being demanded from some firms exceeding their turnover.

(Source: IANS)

-Edited for style

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