The Centre on Wednesday issued show-cause notices worth ₹1 lakh crore to multiple online gaming companies for alleged tax evasion, reported news agency Reuters citing government sources. However, the government official claimed that there is no data yet of foreign gaming companies registering in India since October 1.
“The amount for which show cause notices have been issued to online gaming companies is around ₹1 lakh crore,” a government official told Reuters.
Earlier this month it was reported that more than 100 online gaming applications operating in India are under the scanner of the Directorate General of Goods and Services Tax Intelligence (DGGI) for alleged tax evasion to the tune of around ₹1 lakh crore.
Over the last month, several online gaming companies including Dream11, and Gameskraft, have been issued show-cause notices for alleged short payment of taxes. Last week, Delta Corp received a GST notice for short payment of tax to the tune of ₹6,384 crore, taking the overall tax demand on the company to over ₹23,000 crore.
Separately, a show cause notice was sent to GamesKraft in September last year for alleged GST evasion of ₹21,000 crore.
GST on online gaming firms
In August, the finance ministry decided to impose a 28 percent Goods and Services Tax (GST) on the full value of bets placed on online gaming platforms. According to the GST authority, the amendments to the integrated GST would make it mandatory for offshore online gaming platforms to register in India and pay taxes in accordance with domestic law.
(With inputs from agencies)