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Business News/ News / India/  GST evasion case: More than 100 online gaming firms likely to be investigated, says report
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GST evasion case: More than 100 online gaming firms likely to be investigated, says report

rOfficials to investigate 100 online gaming firms for GST evasion; Supreme Court stays Karnataka HC order on tax notice.

Ministry of Education has issued a slew of advisories on safe online gaming (Mint)Premium
Ministry of Education has issued a slew of advisories on safe online gaming (Mint)

In a move to increase their hold against tax evasion by online gaming companies, now officials are looking to launch investigations against 100 more online gaming firms for eveasion of GST as reported by Business Today.

The Supreme Court earlier stayed the Karnataka High Court order that had quashed the intimation notice of the Goods and Service Tax department seeking 21,000 crore from an online gaming platform.

A bench of Chief Justice D Y Chandrachud and Justices J B Pardiwala and Manoj Mishra issued notice and sought a response to a plea of the Directorate General of Goods and Services Tax intelligence from the Karnataka-based online gaming platform Gameskraft.

“There are over 100 companies registered domestically with online gaming federations. We will start looking into the activities of these companies to check whether there has been any evasion of GST," said a senior official, to Business Today adding that only those firms that have a money component involved in gaming activities will be checked.

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“Out of these 100 companies not all will be involved in real money online gaming. Only those that have such games will be taken up for investigations," said the official.

The matter arose after Gameskraft was issued an intimation notice from the GST authorities on September 8 last year, raising a demand of 21,000 crore. The company challenged the notice before the high court.

A single-judge bench of the high court on September 23, 2022, stayed the notice of the GST department, observing that there were several contentious issues involved in the case.

The online gaming company moved the high court again, claiming that despite this stay order, the authorities had illegally and maliciously issued a show-cause notice on the very same day as the high court's order of September 23, 2022.

The September 8, 2022 notice sought to impose 28 per cent GST on the company's transactions.

Reacting to the development, the company, in a statement, said, “We have noted the interim order of the Supreme Court. We, along with the skilled gaming industry associations, will put forth our submissions before the Supreme Court in the coming weeks."

"We have full faith in the judiciary and are confident that the Supreme Court will reaffirm the settled law of over five decades once again and vindicate our and the industry's position," it said.

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Updated: 25 Sep 2023, 03:11 PM IST
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