Team Blitz India
The Supreme Court has asked the government to submit its response to the plea filed by online gaming companies, challenging the 28 per cent Goods and Services Tax (GST) on full value of bets placed on their platform.
A three-judge bench led by Chief Justice DY Chandrachud has asked the government to respond in two weeks. The petitioners contesting the 28 per cent levy include E-Gaming Federation, Dream 11, Games 24×7 among others.
From October 1, 2023, online gaming companies, whether based in India or outside, are mandated to pay GST at 28 per cent on the entire face value of bets placed. This follows the GST Council decision in July.
Online gaming firms have raised objections over the payment of 28 per cent GST instead of 18 per cent for the period up to October 1, 2023. Gaming firms argue that the 28 per cent levy over online gaming transactions is applicable only starting October 1, but the government is of the view that the revision of rate was done only to provide “clarity” to a law that was already in place.
On December 5, minister of state for finance Pankaj Chaudhary had informed the Parliament that 71 show cause notices involving GST of Rs 1.12 trillion have been issued to online gaming companies during financial years 2022-23 and 2023-24 (April-October).
The government has already started blocking the websites and apps of some offshore online gaming companies that have neither registered their businesses in India nor pay the Goods and Service Tax (GST), quoting an official.