Online gaming companies get summons for cashback to players since October
GST Intelligence (DGGI) has sent fresh summons to online gaming companies, including Delta Corp, seeking details of the cashback given to the players from October onwards.
The agency detected reimbursements of taxed money back to players as cashback in a separate promo account by online gaming companies post implementation of the 28% GST (goods and services tax) on the full entry level betting amount.
The DGGI Gurgaon has sent summons for a period between October 2023 and June 15, 2024, ET has learnt.
«Investigation detected that the real money gaming companies were offering cashback to the players in their promo account for which summons had been sent,» a person aware of the notices sent told ET, clarifying that these were fresh summons and not related to past tax issues.
«There are multiple companies which are being probed,» the person said, declining to divulge details.
Typically, a player has three accounts — a deposit wallet, a payment wallet and a promo wallet. These companies were transferring cashback in the promotional wallet to players.
Email and text queries sent to Delta Corp, which owns poker site Adda52.com, remained unanswered till the time of filing of the story.
In August, the GST Council had clarified that 28% GST was applicable on online gaming and that the tax is to be levied on entry-level bets on online gaming platforms and not on what players pay in each game from the winning amount. The effective date for the amendments was October 1, 2023.
Legal experts said cashback should not be
