Dream11 withdraws plea challenging Rs1,200 cr tax notice

livemint.com:

MUMBAI : Online fantasy sports company Dream11 on Wednesday withdrew from the Bombay High Court its petition challenging notices related to alleged tax evasion amounting to Rs1,200 crore. Appearing on behalf of the Maharashtra government, advocate Jyoti Chavan informed a bench led by Justices GS Kulkarni and Jitendra Jain that the state goods and services tax (GST) authority had withdrawn its show cause notice on Dream11 since Central GST authorities were pursuing the matter before the Supreme Court. Chavan added that the Directorate General of GST (DGGST) would send a fresh show cause notice, which led to Dream11 withdrawing its petition.

Earlier in September, Sporta Technologies Ltd, which operates the Dream11 brand, had approached the high court seeking to quash the show cause notices issued to the company over a steep GST bill. It had filed the petition against the Maharashtra government. The GST show cause notices were issued for the financial years 2017-18 and 2018-19, alleging evasion of the 28% GST on the amount levied for providing gambling services to users.

Essentially, the gaming firm was asked to pay a 28% tax on its gross value, with the tax authority claiming that the company offered gambling services. The company cited various judgments of the top court stating that online fantasy sports gaming provides predominantly a game of skill that does not amount to gambling. The court was also hearing a similar plea by Playerzpot Media Pvt Ltd, an online gaming company that had also challenged show cause notices issued to it by the state tax department and the DGGST.