Govt’s GST claims from gaming firms may touch ₹1.5 tn
₹1.5 trillion ($18 billion) cumulatively to companies in the online gaming sector for alleged underpayment of taxes over several years, three people aware of the matter said. Projections of such taxation notices come a day after Mumbai-based Sporta Technologies, which runs the popular fantasy gaming platform Dream11, filed a writ petition in the Bombay High Court appealing retrospective show-cause notices by the DGGI for FY18 and FY19.
Three senior lawyers who represent top online gaming firms said the DGGI is preparing notices across various firms in the industry, which include Games24x7, Head Digital Works, Junglee Games, Baazi Games and Mobile Premier League. Smaller firms such as WinZO are also on the list of firms that are likely to receive goods and services tax (GST) demand notices from the DGGI in the coming weeks, they said.
“Dream11 is in the process of receiving intimations for FY20 to FY22, which are likely to see compounding tax claims from the DGGI. The tax claim for the final year is likely to reach ₹40,000 crore, with a cumulative tax claim for these years amounting to ₹55,000 crore," one of the lawyers said, requesting anonymity.
A senior government official said that alleged short-payment of taxes, along with penalties, works out to around ₹55,000 crore in these cases, as the penalty applicable is 100% of the due taxes. However, the official underlined that it remains to be seen how far the government will go to recover the alleged tax dues, given the matter is making its way through the judiciary.
One of the lawyers cited above also said that a similar notice, to the tune of ₹19,000 crore, is expected to be received by Mumbai-based Games24x7 as well. A third lawyer added that future tranches of
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