• Notification Date: 02-11-2023
  • Notification No: N/A

Online Gaming Firms receive GST Notices worth Rs 1 lakh crore

Online gaming firms in India have been served tax notices amounting to approximately Rs 1 lakh crore, reported news agency Reuters. This comes after the government decided to levy 28 percent tax on the turnover of online gaming companies, horse racing, and casinos.  

A government source quoted in the report said tax authorities have served notices to multiple gaming companies, demanding around Rs 1 lakh crore for alleged tax evasion. 

"The amount for which show cause notices have been issued to online gaming companies is around Rs 1 lakh crore," the government official, who did not want to be named, told the news agency. 

Online gaming firms face tax hurdle 

Over the past month, several gaming companies in India have received tax notices from the government, including Dream11, Gameskraft and Delta Corp and more. All these firms have challenged the tax notices, calling them unreasonable. 

It may be noted that casino operator Delta Corp shares soared over 8 per cent in early trade today after the Bombay High Court in Goa issued an interim order, prohibiting tax authorities from making any “definitive decisions” without prior court approval. Shares of Delta Corp were up over 2 per cent at around 12:15 pm. 

“The Hon’ble High Court of Bombay at Goa considered the writ petitions filed by the Company and its subsidiaries on 23rd October 2023,” Delta Corp said. 

“Basis a statement made on behalf of the concerned tax authorities; the Hon’ble High Court has directed such authorities not to pass any final orders on the captioned show cause notices without the prior permission of the Hon’ble High Court. Dates have been fixed for completion of pleadings, and the hearing and final disposal of such writ petitions,” it added. 

28% GST 

Online gaming companies in India have been going through a turbulent period after the government decided to impose a 28 percent GST on the total funds deposited to play online games, horse racing and casinos. This led to some firms like Mobile Premier League letting go of employees. 

These firms had requested the government to refrain from imposing 28 per cent GST, arguing that it would lead to a loss of confidence among foreign investors. However, the government went ahead with the higher taxation regime to regulate real money online gaming.