 "gaming")
Online gaming firms that had projected themselves as platforms offering games of skill may have to shell out an additional tax of Rs 45,000 crore, according to a report by The Economic Times (ET).
Goods and Services Tax (GST) liabilities of such firms have been calculated by the Central Board of Indirect Taxes and Customs (CBIC) at about this level since the 2017 rollout. Officials said that these firms paid 18 per cent on gross gaming revenue, categorising the under games of skill instead of the 28 per cent prescribed in the law. The taxation of games of skill and games of chance under different categories has ended.
A senior CBIC official was quoted as saying by ET that according to their internal assessment, since the implementation of GST, the gaming industry has paid Rs 45,000 crore less in taxes.
The Directorate General of GST Intelligence (DGGI) is in the midst of issuing notices to these firms. Since 2017, the online gaming industry has paid less than Rs 5,000 crore GST whereas the actual tax liability is estimated to be over Rs 50,000 crore. This includes in its purview offshore gaming firms who owe Rs 12,000 crore and the Rs 21,000 crore demand raised on Gameskraft.
Earlier this month, the central government filed a special leave petition in the Supreme Court (SC) appealing against the Karnataka High Court decision revoking the tax demand notice of the DGGI imposed on Gameskraft. The official said the latest Central GST amendment has made it clear that every online money gaming firm will attract 28 per cent GST and has to pay the balance tax.
On July 11, the GST council stated that no distinction would be made between games of chance and games of skill and that 28 per cent would be imposed on the full face value of bets. On August 11, the Parliament passed bills to amend the changes to CGST and IGST laws. The industry's position is that the changes should not be applied retrospectively.
