New Delhi: The Goods and Services Tax (GST) authorities have issued show cause notices amounting to a staggering Rs 1 lakh crore to online gaming companies as part of efforts to combat tax evasion, a senior official revealed on Wednesday.
However, despite these crackdowns on tax evasion, the official stated that there is currently no available data indicating foreign gaming companies have registered in India since October 1.
In a bid to strengthen tax compliance and revenue collection, the Indian government made it obligatory for overseas online gaming companies to register in India beginning on October 1. This decision followed the GST Council’s clarification in August that a 28% GST would be imposed on the full value of bets placed on online gaming platforms.
The official stated, “Online gaming companies served notices worth about Rs 1 lakh crore by GST authorities so far.”
Various online gaming platforms, including prominent names like Dream11, and casino operators like Delta Corp, found themselves in receipt of GST show cause notices in the previous month, facing allegations of failing to remit the full taxes due.
In addition to these actions, a show cause notice was sent to GamesKraft in September of the preceding year for an alleged GST evasion totaling Rs 21,000 crore.
Although the Karnataka High Court ruled in favor of GamesKraft, the central government submitted a Special Leave Petition (SLP) in July to the Supreme Court as part of the ongoing legal proceedings. This SLP sought to challenge the Karnataka High Court’s verdict.
This significant push to enforce tax compliance within the online gaming sector showcases the Indian government’s determination to close revenue gaps and reinforce financial oversight. The effectiveness of these efforts will likely depend on how these companies respond to the show cause notices and the legal proceedings that may follow.
