In the biggest show cause notice ever, the Directorate General of GST Intelligence (DGGI) has demanded Rs 21,000 crore tax on Gamescraft Technology (GTPL), which runs several online games like Rummy Culture, Gamezi, Rummy Time etc. Bengaluru-based online gaming company has been accused of evasion of huge amount of tax.
DGGI has now asked Gamescraft to pay GST at the rate of 28% on the total betting amount of Rs 77,000 crore between 2017 and June 30, 2022. As per the reports, the notice issued to any firm regarding indirect is the biggest ever notice. tax evasion.
The GST notice comes after a forensic investigation by DGGI revealed that Gamescraft had not issued any invoices to customers and had submitted fake or past dated invoices to the department. The investigation also found that once the customer had added money to his wallet, the firm did not allow the customer to leave.
Online gaming that does not require the application of any skills is taxed at 28% and the winning amount is also a part of the taxable component.
The gaming firm later issued a statement saying that the notice was against the well-established law of the country. It claimed that skill sports such as horse racing, bridge and fantasy sports are constitutionally protected activities as per the Supreme Court and recognized rummy as a skill sport.
It denied the claim of any infringement of GST and income tax liabilities. Gamescraft said they would respond to the notice to the full satisfaction of officials.