GST Council proposes amendments to enable govt waive retrospective tax dues

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The Goods and Services Tax (GST) Council which met on June 22 recommended an amendment to the Central Goods and Services Tax (CGST) Act, 2017, that would enable the government, on the recommendation of the GST Council to regularize non-levy or short levy of GST, where tax was being short paid or not paid due to common trade practices.

While the proposal is not directed to any specific sector, the major beneficiary will be online money gaming which is struggling with retrospective tax notices. The entire online money gaming sector was paying tax on Gross Gaming Revenue while the department is claiming tax on the full face value of the wager. The matter is before the Supreme Court and will be taken up for a final hearing in July 2024 when the court resumes from vacation.

The apprehension here is even if the department wins the case in the apex court, the tax dues will be several times the annual revenues and net worth of the companies involved making recovery impossible. The skill gaming companies that received tax notices include Dream11 owner Dream Sports, Gameskraft, Games24x7, Delta Corp’s Deltatech Gaming, and Head Digital Works (A23).

The amendment, once passed by the parliament and state legislatures, is expected to enable the government to waive the tax dues providing relief to India’s sunrise money gaming sector.

The sector also anticipated a review of the 28 percent tax levy which became effective from 1 October 2023. However, the finance minister clarified that the matter was not agenda and was not discussed.  We reported earlier that the government is not inclined to review the new tax regime that has been generating good tax revenues since implementation.

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