History's largest ever Rs 21,000 crore GST show-cause notice to online gaming company


Ahmedabad: The Directorate General of GST Intelligence (DGGI) has issued the biggest show cause notice in the history of indirect taxation. DGGI has awarded Bengaluru-based online gaming company GamesCraft Technologies Pvt Ltd (GTPL) Rs. 21,000 crore tax due notice has been sent.

The company is accused of non-payment of GST of Rs 21,000 crore and the show cause notice has been issued for the period from 2017 to June 30, 2022. Gamescraft Technology is accused of promoting online betting through fantasy games like Card, Casual and Rummy Culture, Gamezy, Rummy Time. The Directorate General of GST Intelligence has issued this notice to levy 28 percent tax on betting money worth Rs 77,000 crore.

According to the Directorate General's report, gamescraft technology provides and conducts online betting and gambling by allowing players to bet on the outcome of card games played online.

During investigation, DGGI discovered that Gamescraft was not issuing any invoices to its customers and forensic investigation revealed that fake/outdated invoices were submitted. The regulator cited that the company is encouraging its customers to bet because once the money is in the wallet there is no way to withdraw it.

However, after this report, a Gamescraft spokesperson said, 'All games of skill are constitutionally protected activities as per the orders and observations of the Supreme Court of the country and various High Courts. Rummy is a game like horse racing, bridge and fantasy games.

Thus this notice itself is illegal and baseless. We will give a befitting reply to this notice. The GST department has demanded 28 percent tax on games of chance and lotteries, while 18 percent tax will be applicable on games on the Skill Online platform, the spokesperson added.


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