Online money gaming companies whose platforms purportedly offer games of skill could face tax liability of over Rs 45,000 crore. Central Board of Indirect Taxes and Customs (CBIC) has reportedly assessed the tax liability of such companies, starting from 2017 when Goods and Services Tax (GST) was implemented.
According to an Economic Times report, the platforms offering games of skill were paying 18 per cent tax on their business so far. However, the decision of GST council to tax companies offering games of skill and games of chance at the same rate has increased the tax liability of these companies. The report added that the Directorate General of GST Intelligence (DGGI) is in the process of issuing notices to these companies.
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In the recently concluded Monsoon session of Parliament, the amendments to the CGST and IGST laws were passed to bring an end to the different taxation on games of skill and chance.
Also Read | How 28% Tax Will Impact The Gaming Industry
The report stated that the several industry players have asked government to not tax them retrospectively. Data cited by ET showed that online gaming companies have paid less than Rs 5,000 crore GST since its implementation in 2017. According to the report, the real liability of these companies was pegged at over Rs 50,000 crore in this period.
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Notably, DGGI had issued a notice to Gameskraft demanding Rs 21,000 crore GST last year in September. However, the notice was quashed by the Karnataka High Court in May this year.
Centre has challenged the decision in Supreme Court and noted that the new amendments made it clear that all online gaming will be required to pay 28 per cent GST.
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