The Directorate General of GST Intelligence (DGGI) has reportedly issued around 12 pre-show cause notices to online real money gaming (RMG) firms, accusing them of evading approximately Rs 55,000 crore in Goods and Services Tax (GST).
The GST department has issued a notice exceeding Rs 25,000 crore directed towards fantasy sports platform Dream11. No official from Dream 11 was available for comment on the matter till the filing of this report.
In addition to Dream11, pre-show cause notices have been sent to Play Games 24×7 and its affiliated entities, along with Head Digital Works, as indicated in the report. Authorities have also issued notifications of determined tax liabilities through the DRC-01 A form.
According to sources, Deeam11 headed by Harsh Jain has approached the Bombay High Court in response to the pre-show cause notice sent to it. Furthermore, it anticipates that additional notices of a similar nature will be issued in the coming weeks.
Industry experts suggest that the total GST demand from RMG companies, as raised by DGGI, could potentially reach Rs 1 lakh crore.
These notices were dispatched following a decision taken by the GST Council to impose 28 per cent GST on online gaming platforms, calculated based on the entire face value of bets made at the entry level.
It has been been reported that Play Games24x7 and its associated companies, which include RummyCircle and My11Circle, have received a notice for GST dues amounting to Rs 20,000 crore. Additionally, Head Digital Works has been issued a pre-show cause notice for an amount exceeding Rs 5,000 crore.
No one from RummyCircle or My11Circle were available comments on the matter.
Before this, the highest demand, totaling Rs 21,000 crore, had been directed towards Gameskraft Technology, a company based out of Bengaluru.
On September 6, the Supreme Court had temporarily halted the Karnataka High Court’s decision that had nullified a GST notice issued to Gameskraft Technology, covering the period from 2017 to June 30, 2022.
