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DGGI issues biggest ever show cause notice to pay Rs. 21,000 crores of GST.

The Directorate General of GST Intelligence (DGGI) has issued the biggest show cause notice in the history of indirect taxation to an online gaming company, Gameskraft Technology Private Ltd (GTPL).

The company has been accused of not paying GST to the tune of Rs 21,000 crore and the show cause notice is for the period between 2017 to June 30, 2022.

Gameskraft Technology was accused of promoting online betting through card, casual and fantasy games like Rummy Culture, Gamezy, Rummy Time, etc and DGGI has slapped a 28 percent tax on betting amounts of nearly Rs 77,000 crore.

  • During the investigation, DGGI found out that Gameskraft was not issuing any invoices to its customers and submitted fake/back dates invoices, which were caught by forensic examination.
  • Gameskraft spokesperson said, "Games of skill are a constitutionally protected activity per the Supreme Court and various High Courts across the country. Rummy is one such game declared to be a skill game like horse racing, bridge and fantasy games. Therefore, the notice is a departure from the well-established law of the land."
  • "As a responsible start-up with Unicorn status in the online skill gaming sector, we have discharged our GST and Income Tax liabilities as per standard industry practice, which is now over a decade old. We are confident that we will be able to respond to this notice to the full satisfaction of the authorities since they have sought to apply 28% tax applicable to games of chance and lottery, instead of the 18% applicable to online platforms of games of skill," the spokesperson added.

According to the DGGI report, GTPL was engaged in betting by allowing its players to place bets in form of money stakes and it allowed bets on the outcome of card games played online.

Also, the DGGI said the company was inducing its customers to bet as there was no way of return once money was added to the wallet. Gameskraft was launched in 2017 by a group of passionate gamers to delight the Indian gaming community with skill-based games.

Source - cnbctv18.com

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Author:

TaxReply


Sep 26, 2022

Comments


And now the Gaming company will vanish. Long live Indian Tax Laws. JAI HIND.
By: Joseph Anandraj | Dt: Sep 27, 2022


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