• Notification Date: 27-09-2023
• Notification No: N/A

Dream11 and Other Online Gaming Companies receive GST Demand Notices of Rs 55,000-crore

The Directorate General of GST Intelligence (DGGI) has reportedly sent out a dozen pre-show cause notices to online real money gaming (RMG) companies over alleged goods and services tax (GST) evasion of about Rs 55,000 crore. As per reports, a GST notice of over Rs 25,000 crore has been sent to fantasy sports platform Dream11, led by Harsh Jain, which makes it possibly the largest indirect tax notice served in the country. 

Apart from Dream11, pre-show cause notices have also been served to Play Games 24x7 and its affiliates, and Head Digital Works, as per the report. An intimation of tax determined as payable through the DRC-01 A form is issued by authorities. 

The ET report further cited industry sources and mentioned that the Harsh Jain led company has moved the Bombay High Court against the pre-show cause notice issued it. It added that more such notices are expected over the coming weeks. The total GST demand raised by DGGI from RMG companies might touch Rs 1 lakh crore, as per industry executives. 

The notices were sent after the GST Council decided to levy a 28 per cent GST on online gaming on the full-face value of bets at entry level. 

Reportedly, Play Games24x7 and its affiliates, including RummyCircle and My11Circle, have been served a notice seeking GST dues of Rs 20,000 crore while Head Digital Works has been served with a pre-show cause notice of over Rs 5,000 crore. 

Previously, the largest such demand at Rs 21,000 crore, was sent to Bangalore-based Gameskraft Technology. The Supreme Court on September 6 stayed Karnataka High Court's judgment, which quashed a goods and services tax (GST) notice against online gaming company Gameskraft Technology. 

The notice was for the period between 2017 and June 30, 2022.