The postponement in bringing about amendments to the GST laws in various states, along with the subsequent enforcement of these laws, is likely to shift the review of the new 28% GST rate on online gaming, casinos, and horse racing to the next fiscal year, according to the recent reports.
Sources who are familiar with the matter have disclosed that some online gaming firms have already taken legal action and some of them are contemplating the same in response to the recent unprecedented tax notices received from the Director General of GST Intelligence (DGGI).
Officials say that the decision to impose a 28% GST on the full face value primarily aimed to eliminate the ambiguity regarding the taxation of the aforementioned activities.
The 50th GST Council meeting established that the GST rate would be levied on the full face value, while the 51st meeting finalized the methodology for taxing only the initial deposit amount.
“As per the law, demands have been raised to all those online gaming firms that did not pay GST since 2017. Any kind of betting always attracted the highest GST rate. Naturally, those who did not pay the tax have accumulated dues along with penalties and interest”, an official said as per Hindustan Times.
After the Supreme Court’s stay order on the Karnataka High Court’s decision in the Gameskraft GST show-cause notice matter, the GST intelligence started issuing similar notices to other gaming firms. Among the recent gaming companies to receive such notices were Dream11 for Rs 1,221 crore, Delta Corp for Rs 16,822 crore, Play Games24x7 for Rs 20,000 crore, and Head Digital Works for Rs 5,000 crore in GST payments. The total tax demand is likely to surpass Rs 1 lakh crores.
The GST Council will hold its 52nd meeting on October 7. According to the recent reports, the Council is likely to address several aspects of GST implementation and other related matters.