Mumbai: Other online gaming companies including ‘Dream 11’ have been hit by the central government. Notices have been issued to these online gaming companies to pay a tax of Rs 55 thousand crores. By Directorate General of GST Intelligence (DGGI) has issued show cause notices to online real money gaming companies. These companies have been accused of tax evasion of around Rs 55,000 crore in goods and services tax (GST). It is reported that the GST department has accused the fantasy sports platform Dream 11 of a total tax evasion of 40 thousand crores.
The authorities have also issued notification of assessed tax liabilities through Form DRC-01A. According to sources, Harsh Jain-led Dream 11 has approached the Bombay High Court challenging the show-cause notice sent to them. Moreover, additional notices of a similar nature are expected to be issued by the GST department in the coming weeks. Last year, Dream11 made a profit of Rs 142 crore on an operating revenue of over Rs 3,840 crore, reports MoneyControl.com.
One lakh crore GST demand?
The total GST demand of RMG companies raised by DGGI could potentially touch Rs 1 lakh crore, say industry experts. The notices were sent after the GST Council decided to levy 28 per cent GST on online gaming platforms, calculated on the basis of the full face value of claims made at the entry level.
These companies also received a notice
Related companies including Play Games24x7 and RummyCircle and My11Circle have received GST arrears notices worth Rs 20,000 crore. Additionally, a show-cause notice has been issued to Head Digital Works for over Rs 5,000 crore.
The last meeting of the GST Council was held on August 2 under the leadership of Union Finance Minister Nirmala Sitharaman. The meeting approved amendments to the GST Act to provide clarity in taxation of casinos, horse racing and online gaming. In the previous meeting, it was decided to levy 28 percent GST on the total face value of bets on casino, horse racing and online gaming.