• Notification Date: 06-12-2023
• Notification No: N/A

GST Evasion of Rs 1.51 Lakh- crore of Tax Evasion detected, 71 Notices issued to Online Gaming Companies

About Rs 1.51 lakh crore of tax evasion was detected by the Goods and Services Tax (GST) authorities till October in the financial year 2023-24, with Maharashtra, Haryana and Gujarat among the states with the highest amount of evasion, data shared by the Finance Ministry in Parliament showed. As many as 71 show cause notices have been issued to online gaming companies for alleged GST evasion of over Rs 1.12 lakh crore during financial years 2022-23 and 2023-24, reply to another question by the ministry stated. 

Meanwhile, under its special drive, GST authorities detected tax evasion of Rs 24,010 crore and 21,791 non-existent entities, another reply by Finance Minister Nirmala Sitharaman stated. Out of the total 21,791 entities whose GST registrations were discovered to be non- existent, 11392 entities pertained to state tax jurisdictions and 10,399 entities pertained to CBIC jurisdiction. State authorities detected Rs 8,805 crore of tax evasion, while Central authorities detected evasion of Rs 15,205 crore during the special drive. 

For the total GST evasion of Rs 1.51 lakh crore detected by central GST officers in the current fiscal (till October 2023), 154 persons were arrested. A recovery of Rs 18,541 crore has been made so far, this fiscal, the ministry said. This compares with detection of over Rs 1.31 lakh crore as evasion in financial year 2022-23, with recovery of Rs 33,226 crore, Minister of State for Finance Pankaj Chaudhary. 

To the other question in the Rajya Sabha by BJP MP Sushil Kumar Modi on the amount of tax evasion and number of show cause notices issued to online gaming companies, Chaudhary said: “71 show cause notices involving GST to the tune of Rs 1,12,332 crore have been issued to online gaming companies during financial years 2022-23 and 2023-24 (up to October 2023). As these notices are pending adjudication, the respective GST demand is not yet determined under the provisions of CGST Act, 2017.” 

The government has amended the GST law, making it mandatory for overseas online gaming companies to register in India from October 1. In August, the GST Council clarified that 28 per cent GST would be levied on the full value of bets placed on online gaming platforms. Since then, many gaming companies received either an intimation notice or a show cause notice for short payment of GST. 

Amended legal provisions and rules for online gaming, horse racing and casinos came into effect from October 1, bringing into effect the 28 per cent GST at face value at entry level and mandatory registration for offshore online gaming companies in India. The online gaming companies claim they were paying taxes at the rate of 18 per cent as the games played on the platform were ‘games of skill’.