‘Tax notice to e-gaming firms for GST evasion’

He stated that the tax demands are in accordance with legal provisions.
‘Tax notice to e-gaming firms for GST evasion’

NEW DELHI:  The Central Board of Indirect Taxes and Customs (CBIC) Chairman Sanjay Kumar Agarwal on Thursday said show cause notices have been issued to e-gaming companies for alleged goods and services tax (GST) evasions, based on data. 

He stated that the tax demands are in accordance with legal provisions.“The department is taking a uniform stand in interpretation of the law, and accordingly, show cause notices are being issued,” Agarwal said. Agarwal further added that the government is fully prepared to implement the amended provisions, effective October 1, which include imposing a 28% tax on online gaming, casinos, and horse racing, along with mandatory registration for offshore online gaming platforms.

The GST Council had approved amendments in July and August to classify online gaming, casinos, and horse racing as taxable actionable claims, subjecting them to a 28% GST on the full bet value. Parliament subsequently passed the amendments to the Central GST and Integrated GST laws to give effect to the Council’s decision.

Following the legislative changes, e-gaming companies such as Dream11 and Delta Corp received show cause notices for alleged non-payment of GST at 28% on the full face value of bets placed on their platforms. Agarwal said the challenges to provide an estimate of the tax amounts due from these e-gaming companies as data is still being collected. 

Agarwal emphasised that the government is fully prepared to implement the amended provisions from October 1. The related notifications are currently under process, and it is crucial for all states to pass the necessary laws or issue ordinances by September 30.

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