Online Gaming: Income Tax Officials too Face Difficulty in Gameskraft Case

Not only have the GST authorities hit a legal snag in their quest to recover Rs.21,000 crore from Gameskraft. Even the income tax department, which sent letters to the corporation and over 10,000 players, is encountering difficulties.

Its not that only some players have not answered, but many of those who did complain that their PAN has been exploited. And, according to the great majority, they have lost money throughout the process, having won a few contests but losing many more.

Top officials in the CBDT argued that the responsibility arose on gross winnings when the notices were sent, despite the tax regime not distinguishing between net winnings and gross winnings at the time. The law was only changed this year to make it clear that tax must be subtracted from and squared off in accordance with net earnings. The levy was left at 30% in the budget, although FM Nirmala Sitharaman suggested returning to the previous TDS threshold of Rs 10,000.

Officials have severe worries about this. The authorities are now at a loss as to how to handle the matter after sending out thousands of warnings and get answers. Gaming company taxation has been a source of debate, with GST Council also disputing the method. Ministers and officials have been debating this issue for months, but the states and the Centre have not been able to come to an agreement.