Over 100 more online gaming firms to be investigated for GST evasion 

The tax authorities are set to spread their net wider against online gaming companies. According to sources, the Directorate General of GST Intelligence is set to launch investigations against 100 more firms in the coming months to ascertain if there has been any evasion of goods and services tax.

The move comes after the Supreme Court stayed a Karnataka High Court ruling that quashed a Rs 21,000 crore GST demand notice on online gaming company Gameskraft.

“There are over 100 companies registered domestically with online gaming federations. We will start looking into the activities of these companies to check whether there has been any evasion of GST,” said a senior official, adding that only those firms that have a money component involved in gaming activities will be checked.

“Out of these 100 companies not all will be involved in real money online gaming. Only those that have such games will be taken up for investigations,” said the official.

The DGGI is already investigating 35 to 40 online gaming firms for any GST evasion and is set to issue notices in many of these cases. Sources said the total money involved would be over Rs 33,000 crore.

Additionally, a number of state GST departments such as those in Haryana and Maharashtra are also looking into activities of some of the online gaming companies. Similar investigations are also being launched by Central GST authorities in some instances.

“The Supreme Court order gives some clarity to field units on how to proceed in these cases. The revenue department’s stand has always been that 28 per cent GST has to be levied on online games where real money is involved,” said another source.

“The Supreme Court paves the way for investigations to be finalised by field units and they will continue these cases and issue show cause notices,” said the second source.

The Special Leave Petition filed by the revenue department on the Karnataka High Court ruling in the Gameskraft case is listed to be heard on October 10.

Meanwhile, following the GST Council decision, a 28 per cent GST will be levied on the full face value of bets placed at the entry level and not on the winnings that is used to place further bets.

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