158 Cases Filed Against Gaming Companies for GST dues worth ₹1.53 lakh crore: MoS Finance in Parliament

Prepend to the content

The Finance Ministry has revealed that 158 cases involving GST dues of ₹1.53 lakh crore have been registered against online gaming companies as of January 2025. This announcement comes as part of the government’s ongoing scrutiny of tax compliance in the gaming industry.

According to the report by Businessline, the government has also issued 91 show-cause notices to gaming companies between July 2017 and January 2025, amounting to ₹1.44 lakh crore. The Ministry of Finance reaffirmed that online gaming is subject to a 28% GST rate, a decision gaming companies continue to dispute.

Challenges in Tax Collection from Online Gaming

Minister of State for Finance Pankaj Chaudhary clarified that tax details of online gaming companies cannot be sourced from Income Tax Returns (ITR), as there is no specific business code for online gaming in the ITR filing system. Similarly, under GST regulations, there is no distinct tariff item or service code for online gaming, including real money gaming and e-Sports.

Supreme Court to Hear Gaming Taxation Case

The Supreme Court is set to hear a group of pleas on March 18 challenging the show-cause notices issued to online gaming companies. Earlier, in January 2025, the court stayed show-cause notices amounting to ₹1 lakh crore against 50 online gaming companies and casinos. However, the ruling also ensured that these notices would not become time-barred during litigation.

Government’s Classification of Online Gaming for Taxation

As of October 1, 2023, amendments to the Central Goods and Services Tax (CGST) Act, 2017 have classified online gaming as a taxable category:

• “Specified Actionable Claim” includes betting, gambling, horse racing, lottery, casinos, and online money gaming.
• “Online Gaming” refers to games offered over the internet or an electronic network.
• “Online Money Gaming” is defined as gaming where players deposit money or digital assets in the expectation of winning real monetary rewards.

“On the recommendations of the GST Council, the valuation of supply of actionable claims involved in online money gaming is done based on the amount paid or payable to or deposited with the supplier (initial deposit), by or on behalf of the player (excluding the amount entered into games/bets out of winnings of previous games/bets). As per the recommendations of the GST Council, ‘online money gaming’ is treated as a ‘specified actionable claim’ and GST at the rate of 28 per cent is levied on the same,” Chaudhary said in a written statement.

Measures to Prevent Tax Evasion in Online Gaming

The government has introduced several policy measures under GST regulations to enhance tax compliance:

• GSTR Filing Restrictions – Businesses failing to file GSTR-3B for a tax period cannot file GSTR-1 for the following period.
• Mandatory Sequential Filing – Companies must file GSTR-1 before GSTR-3B, ensuring consistency in tax reporting.
• Input Tax Credit Restrictions – Credit can only be availed based on details furnished by suppliers in GSTR-1 and verified in GSTR-2B.
• Automated Tax Liability Notices – System-generated alerts notify taxpayers of mismatches between GSTR-1 and GSTR-3B filings.
• E-Invoicing for B2B Transactions – Electronic invoicing is mandatory for businesses exceeding ₹5 crore turnover.
• Biometric-Based Aadhaar Authentication – Risk-based Aadhaar authentication is now required for GST registration applicants nationwide.
• Centralized GST Registration Suspensions – Businesses failing to file returns for six consecutive months may face automatic suspension.

For direct tax compliance, the Income Tax Department monitors violations through notices, inquiries, search and seizure operations, and assessments.

Impact on the Online Gaming Industry

With tax-related legal battles intensifying, the online gaming industry faces uncertainty and compliance challenges. The upcoming Supreme Court hearing on March 18 will be a crucial moment for gaming companies seeking relief from the government’s tax demands.

As India’s gaming sector expands, businesses will need to adapt to evolving tax laws while ensuring full compliance to avoid penalties.

The post 158 Cases Filed Against Gaming Companies for GST dues worth ₹1.53 lakh crore: MoS Finance in Parliament appeared first on G2G News.