Govt to consider some relief for money gaming industry from retrospective GST claims

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The government is likely to consider some form of relief to the money gaming industry from the retrospective tax claims according to an official, as reported by  Financial Express. The matter is already before the Supreme Court with final hearing expected in July 2024.

However, rumour is that even if the government receives a favourable order, the recovery may be difficult considering the demand notices are few times higher than the annual revenues of the noticee companies. It is in this background, the government the reportedly mulling providing relief to the industry irrespective of the outcome before the Supreme Court as per a report in the Financial Express.

The Supreme Court in April transferred to itself 27 writ petitions which are pending across nine State High Courts, challenging the levy of 28% GST on all forms of online real-money gaming with retrospective effect.

The Centre had sought the transfer of the petitions from the High Courts to the Supreme Court considering all these deal with similar questions.

The Court had also sought a response from the Directorate General of Goods and Services Tax Intelligence in this issue. The petitioners include Dream 11, Games 24×7, and Head Digital Works.

In September last year, as the Supreme Court imposed a stay on operation of a Karnataka High Court order, the GST field officers issued notices of over Rs 1.12 lakh crore to online gaming companies for alleged tax evasion, prompting legal challenges.

The Karnataka High Court earlier quashed a GST intimation notice of Rs. 21,000 crore while holding that online or electronic or digital rummy played on Gameskraft, a gaming platform, was not taxable as a betting or gambling activity.

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