GST show cause notices worth Rs 1 lakh crore have been issued to online gaming companies for tax evasion so far, according to a media report.
The Goods and Services Tax (GST) authorities have slapped notices to a host of online gaming firms like Dream11 for alleged short payment of taxes, it said.
According to the Reuters report, a show cause notice was sent to GamesKraft in September last year for alleged GST evasion of Rs 21,000 crore.
In August, the GST authority imposed 28 per cent tax on online gaming companies on the total funds deposited to play online games.
Notably, the government amended the GST law, making it mandatory for overseas online gaming companies to register in India from October 1. The Ministry of Finance notified October 1 as the date for implementation of the amended GST law provisions for taxing e-gaming, casinos, and horse racing.
In its notification, the GST authority said amendments to Integrated Goods and Services Tax (IGST) will make it mandatory for offshore online gaming platforms to register in India and pay taxes in accordance with the domestic law.
Rajeev Chandrasekhar, the Union Minister of State for Electronics and Information Technology, recently said online gaming segments can add up to USD 300 billion to India’s GDP by 2026-27.
The government sees that permissible and legally acceptable online gaming is an important part of opportunities before youngsters, he had said on concerns raised by the online gaming industry over high taxation.