In a major setback to the online gaming companies, the government is not inclined to give any relief to money gaming industry in relation to past GST demands, top finance ministry sources confirmed as per a report by The New Indian Express.
It is worth noting that the Additional Solicitor General Venkatraman in a recent hearing before the Supreme Court dismissed the reports about a rift between senior government officials and the legal team on pursuing retrospective GST notices against online gaming companies.
Venkatraman then noted that all arms of the government are working unitedly and on the same page in terms of pursuing retrospective Goods and Services Tax (GST) notices to online real money gaming firms.
“Industry is already aware of our stand. They want to pay at 18% on the gross gaming revenue (GGR) or the platform fee. The law already existed that they need to pay 28% GST on each bet placed, being a game of chance,” a top Government official was quoted as saying by TNIE.
While government has brought in a new tax regime taxing deposits at 28% effective from 1 October 2023, the tax department views the change as only clarificatory in nature and 28% tax on full value of wager amount is applicable since July 2017.
It is in this background the tax authorities have issued show cause notices to around 99 online real money gaming companies so far.
The Bombay HC, the Goa bench of Bombay HC, Karnataka HC, Calcutta HC, and the Sikkim HC are hearing cases pertaining to GST notices to online gaming companies and casinos while two cases are pending before the apex court.
The final hearing in the cases before the Supreme Court is scheduled for 2 April 2024 and the cases before various High Courts are expected to be transferred to the apex court before the final hearing.
