40 Online Gaming Firms to Receive GST Evasion Notices

Around 40 online gaming companies in India may receive notices from the Goods and Services Tax (GST) department for alleged tax evasion totaling around 21,000 crore rupees. The Karnataka High Court had stayed the release of GST notices against Gameskraft Technologies (GTPL), and this decision was upheld by the Supreme Court on September 6th. The cancellation of GST notices against GTPL had been issued on May 11, 2023. It is now likely that a significant number of online gaming companies will receive notices during the coming days. The GST authority had initiated the process of issuing notices to other online gaming companies after the Karnataka High Court’s stay order, as GTPL and other gaming companies’ activities were deemed similar.

Gameskraft Technologies is the largest player in the online gaming industry, and it is the first company to challenge GST notices in the history of Interactive Transaction. GST Intelligence Directorate had initiated an investigation into gaming companies, including GTPL, for allegedly evading taxes by not paying GST between August 17 and June 22, 2022.

GST Evasion Cases at 28% Tax Rate between August 17 and June 22

Online gaming companies have accelerated online betting through games. From August 17 to June 2022, they allegedly evaded GST without paying taxes. According to Additional Solicitor General N. Venkataraman, after the Karnataka High Court’s stay, notices are likely to be issued to approximately 35 other Jetly gaming companies.