A dozen online gaming companies are under investigation by DGGI for tax cheating, and show-cause warnings similar to those issued to Gameskraft Technology will shortly be sent to these companies, according to sources.
Reetu | Apr 19, 2023 |
GST Intelligence will shortly conclude its Investigation into 12 Online Gaming Companies for Tax Evasion
A dozen online gaming companies are under investigation by the Directorate General of GST Intelligence (DGGI) for tax evasion, and show-cause notice similar to those issued to Gameskraft Technology will shortly be sent to these companies, according to sources.
Bengaluru-based Gameskraft Technology was handed a Rs 21,000 crore GST evasion notice on September 8, 2022.
The government will shortly finish its probe into additional online gambling organisations and send show-cause notice to those businesses. Notices to show cause will soon be delivered to 11–12 firms. A government official stated that the amount of evasion was still being determined.
Though the Gameskraft case is now in court, other online gambling companies will face no delays in receiving show cause notices. The GST intelligence wing intervened in the Gameskraft affair. As a result, he stated, a consistent stance will be taken as part of the current investigation.
The GST Council is expected to address taxes on online gambling companies at its next meeting, with the fundamental question being whether to tax the entire winning pot at 28 percent or the net amount after decreasing the prize money.
The GST law still lacks a definition of games of chance and games of skill. Currently, internet games are subject to 18% GST, while betting is subject to a 28% tax rate.
The GoM commission on online gaming has proposed a 28% tax on all online games, casinos, and horse racing, including games of chance and games of skill. Conrad Sangma, the chief minister of Meghalaya, leads the GoM. Mauvin Godinho, Minister of Panchayati Raj in Goa, P Thiaga Rajan, Finance Minister in Tamil Nadu, Suresh Khanna, Finance Minister in Uttar Pradesh, and T Harish Rao, Finance Minister in Telangana, are among those on the list.
However, the ministerial panel on online gaming has failed to achieve an agreement on the mechanism for calculating the amount on which GST will be paid.
The online gaming business has claimed that if wins are subject to the 28 percent GST, the industry will become unviable.
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