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Dream11 withdraws plea in Bombay HC challenging Rs 1221 crore GST show cause notice

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Fantasy sports platform Dream 11 has withdrawn its plea before the Bombay High Court challenging the GST show cause notice amounting to Rs 1221 crore issued by the Maharashtra state GST department.

Advocate Jyoti Chavan representing the state informed the bench headed by Justice GS Kulkarni and Justice Jitendra Jain that the state GST authority has withdrawn its show cause notice and will be sending a fresh one. In light of this move, Dream11 has withdrawn its plea, reported Bar and Bench.

The GST notice to Dream11 demanded tax dues for the financial years 2017-18 and 2018-19 at the rate of 28%. However, the 28% GST rate was implemented starting October 1 only. This prompted the company to file a plea, asking the court to quash the show cause notice.

Meanwhile, a similar plea from another online gaming firm, Playerzpot, who was handed a GST notice amounting to Rs 532 crore by the authorities, was also heard by the Bombay High Court.

The GST notices have not differentiated between skill-based games and chance-based games, calling them “actionable claims” and implemented the 28% GST rate for online gaming, casinos and horse racing.

Furthermore, the online gaming companies have argued that the tax is retrospective in nature, which is being denied by the tax authorities claiming the tax rate in place was already 28% and the latest amendments have only made that clear.

Meanwhile, earlier last month it was revealed that the Centre will ask the Supreme Court to club all the GST-related online gaming cases before it under a single principle.

Online gaming companies, on the other hand, are confident that the final verdict will be in their favour based on previous rulings of the Supreme Court that declared these activities as skill-gaming ones which are separate from chance-based games.

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