40 gaming companies may get fresh GST notices
online gaming companies, said people with knowledge of the matter. This follows the GST Council on Tuesday approving a flat 28% levy on online gaming. Officials said liabilities in the case of the 40 online gaming companies could add up to Rs 10,000 crore.
The authorities had been awaiting clarity from the GST Council on taxing online gaming companies, said the people cited above. Also, the Centre is expected to file an appeal in the Supreme Court against the Karnataka High Court verdict in the Rs 21,000 crore Gameskraft tax case. This will be done once the GST law is amended to allow the 28% levy, said people with knowledge of the matter.
The official cited above said the Central Board of Indirect Taxes and Customs will issue fresh instructions for cases pending in various courts following the council's decision. «We will initiate action against 40 online gaming firms, where action was pending because of legal complexity over (the distinction between) games of skill or chance,» said the official. In the Gameskraft case, the platform had argued that the GST rate should be 18%, which used to be the slab for games of skill.
The Directorate General of GST Intelligence had contended that Gameskraft's offerings were games of chance and hence liable for the 28% levy. «We have delayed filing a petition in the Gameskraft case as we were waiting for the council's decision and once the amendment is done we will move the Supreme Court,» a senior official told ET. The GST Council's decision stipulates that all online gaming will attract the top GST rate, whether based on skill or chance, sparking widespread condemnation by the industry.
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