DGGI or the Directorate General of Goods and Services Tax Intelligence Mumbai Zone, has issued two notices to online gaming companies Dream11 and Play Games 24X7.
The authorities have demanded a payment of Rs 28,000 crore from Dream11 and Rs 21,000 crore from Play Games 24X7, according a report by CNBC TV18.
Dream11, a prominent online fantasy sports gaming platform in India, has become embroiled in a complicated tax dispute with both state and central tax authorities. Following an audit by Maharashtra state GST audit authorities in December 2020, final audit reports were issued on 10 January, 2022, and 6 January, 2023. This prompted Dream11 to file a writ petition before the Bombay High Court in response to the show cause notice issued by the state authorities.
The controversy surrounding Dream11 is centered around allegations of improper classification of online fantasy sports gaming activities. The DGGI Mumbai Zone has accused Dream11 of failing to submit the necessary documents despite numerous reminders.
To address these concerns, the DGGI conducted a detailed inspection on 14 September, 2023. Dream11 responded to the inspection by submitting documents in the form of GST DRC 01 for the financial years 2017-18 and 2018-19, issued by the state government of Maharashtra on 12 September, 2023.
The notices come days after the tax authorities had announced that they will be probing over a 100 online gaming firms in the coming months to see if there has been any evasion of the goods and services tax (GST). DGGI has sent tax notices to many other online gaming firms like Games24x7, Nazara Technologies, Gameskraft, and Delta Corp in the past few days.
Dream11 has received two notices by the tax authorities in a month.