GST authorities have so far sent show cause notices totaling Rs 1 lakh crore to online gaming enterprises for tax fraud on 25 October, according to a senior official.
The source, however, claimed that as of right now, there is no information regarding foreign gaming companies that have registered in India since 1 October.
The GST law has been changed by the government, and as of 1 October, foreign online gaming enterprises must register in India. The GST Council had made it clear in August that the full amount of bets placed on online gambling platforms will be subject to a 28 per cent Goods and Services Tax (GST).
GST authorities levied a 28 per cent tax on online gaming companies on the total funds deposited, meaning the full value of bets, in August 2023.
For alleged underpayment of taxes, a number of online gambling companies, including Dream11, and casino operators, including Delta Corp, received GST show cause notifications last month.
Moreover, GamesKraft received a show cause notice in September of last year for allegedly evading GST by Rs 21,000 crore. Despite the fact that the Karnataka High Court decided in the company's favour, the central government filed a Special Leave Petition (SLP) with the Supreme Court in July.
According to recent comments made by Union Minister Rajeev Chandrasekhar, the online gaming and artificial intelligence (AI) industries could boost India's GDP by $300 billion by 2026–2027.
In response to the online gaming industry's complaints about high taxes, he stated that the government saw "permissible and legally acceptable" internet gaming as a significant component of the opportunities available to children.
With inputs from PTI