GST authorities have issued show cause notices worth ₹ 1 lakh crore to online gaming companies for tax evasion so far, a senior official said on Wednesday.
The official, however, said that there is no data yet of foreign gaming companies registering in India since October 1.
The government has amended the GST law, making it mandatory for overseas online gaming companies to register in India from October 1.
Separately, a show cause notice was sent to GamesKraft in September last year. (Representational)
GST authorities have issued show cause notices worth ₹ 1 lakh crore to online gaming companies for tax evasion so far, a senior official said on Wednesday.
The official, however, said that there is no data yet of foreign gaming companies registering in India since October 1.
The government has amended the GST law, making it mandatory for overseas online gaming companies to register in India from October 1.
The GST Council had in August clarified that 28 per cent Goods and Services Tax (GST) would be levied on full value of bets placed on online gaming platforms.
"Online gaming companies served notices worth about ₹ 1 lakh crore by GST authorities so far," the official said.
A host of online gaming, like Dream11, and casino operator, like Delta Corp, have received GST show cause notices last month for alleged short payment of taxes.
Separately, a show cause notice was sent to GamesKraft in September last year for alleged GST evasion of ₹ 21,000 crore.
While the Karnataka High Court has ruled in favour of the company, the central government in July filed a Special Leave Petition (SLP) in the Supreme Court.
“In the case of online gaming, one case has been decided by the Karnataka high court. That matter is before the Supreme Court. They will be deciding on the core issue. The recovery (of the tax demand) will depend on the outcome of court cases," said the official.
The reference was to a dispute between GST authorities and Gameskraft Technologies Pvt. Ltd, which secured a favourable order from the Karnataka high court in May on the levy of 28% GST on online gaming.
The high court quashed the over- ₹20,000 crore notice issued by the Directorate General of GST Intelligence (DGGI). But the order was stayed by the Supreme Court in September on an appeal filed by the government.
However, tax authorities are unlikely to go for an aggressive recovery drive as they await the Supreme Court decision on 28% GST on online gaming companies, bringing relief to these platforms.
Emails sent to the spokespeople for the finance ministry, Central Board of Excise and Customs and Gameskraft on Wednesday remained unanswered at the time of publishing.
These show-cause notices for ₹1trillion cited above only concern online gaming firms and casinos.
The official, however, did not give an amount for the overall shortfall in payment of GST by all the businesses, the FY18 GST returns of which have been audited.
Notices post the first audit of GST returns have also gone out to sectors like auto manufacturers and insurance for dues on their tax payments.
While the levy of 28% GST on online gaming companies, casinos and horse racing clubs is under dispute for the period up to the end of September, the government has amended tax laws to make sure that the highest GST slab applies to entities in these sectors with effect from 1 October.