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The Director General of the GST Intelligence department had sent a notice of Rs 21,000 crore to Gameskraft Technology (GTPL) for allegedly evading GST on the betting amount.
The company is accused of promoting online betting through card, casual, and fantasy games like Rummy Culture, Gamezy, and Rummy Time.
The notice has been served for the transactions that happened between 2017 and June 2022. The online gaming firm has been providing back-dated invoices to the tax authorities for the purpose of evading taxes
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The company allowed its customers to place money for its online betting games and didn’t issue an invoice on the betting amount. The betting amount has been calculated at around Rs 77,000 crore on which the department has levied 28 % GST.
“Rummy is one such game declared to be a skill game like horse racing, bridge, and fantasy games. Therefore, the notice is a departure from the well-established law of the land. As a responsible start-up with a Unicorn status in the online skill gaming sector, we have discharged our GST and income tax liabilities as per standard industry practice, which is now over a decade old,” said the Gameskraft spokesperson.
“We are confident that we will be able to respond to this notice to the full satisfaction of the authorities since they have sought to apply 28% tax applicable to games of chance and lottery, instead of the 18 % applicable to online platforms of games of skill.” said the same person.
The GST rate for online gaming, horse racing, and casinos is yet to be decided by the Panel. In the meantime, they are also trying to figure out whether online games of skill should be treated differently from games of chance
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