71 show cause notices issued to online gaming firms involving GST: FinMin

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As many as 71 show cause notices have been issued to online gaming companies for alleged GST evasion of over Rs 1.12 lakh crore during financial years 2022-23 and 2023-24, the finance ministry said on Tuesday.

The total Goods and Services Tax (GST) evasion detected by central GST officers in the current fiscal (till October, 2023) was Rs 1.51 lakh crore, while 154 persons have been arrested. A recovery of Rs 18,541 crore was made so far this fiscal.

Giving details of detection of GST evasion, Minister of State for Finance Pankaj Chaudhary said in 2022-23 fiscal, evasion to the tune of over Rs 1.31 lakh crore was detected and 190 persons were arrested. A total of Rs 33,226 crore was recovered during the fiscal.

In 2021-22, 2020-21 and 2019-20, GST evasion stood at Rs 73,238 crore, Rs 49,384 crore and Rs 40,853 crore, respectively.

To a question in the Rajya Sabha on the amount of tax evasion and number of show cause notices issued to online gaming companies, Chaudhary said: “71 show cause notices involving GST to the tune of Rs 1,12,332 cr have been issued to online gaming companies during financial years 2022-23 and 2023-24 (up to October 2023). As these notices are pending adjudication, the respective GST demand is not yet determined under the provisions of CGST Act, 2017.”

No overseas online gaming companies have registered in the country since October 2023, Chaudhary added.

The spate of notices to online gaming companies follows the GST Council’s clarification in August that 28 per cent tax would be levied on full value of bets placed on online gaming platforms.

GST Council is chaired by the Union finance minister and comprises finance ministers from all states and Union Territories.

The online gaming companies have been approaching High Courts against such GST demands contesting the claims of revenue authorities. The online gaming companies claim they were paying taxes at the rate of 18 per cent as the games played on the platform were ‘games of skill’.

The government has also amended the GST law, making it mandatory for overseas online gaming companies to register in India from October 1.

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Pooja Gupta

CA Pooja Gupta (CA, ISA, M.com) having 15 years of experience. Educator and Digital Creator

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CA Pooja Gupta (CA, ISA, M.com) having 15 years of experience. Educator and Digital Creator

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