The Directorate General of GST Intelligence (DGGI) has raised a tax demand of Rs 55,000 crore from Dream11 and other online gaming companies on the grounds of goods and services tax (GST) evasion. The demand is based on the DGGI’s assessment that the online gaming companies have not been paying GST on the full value of their services.
The DGGI has sent out pre-show cause notices to a dozen online gaming companies, including Dream11, Play Games24x7, and Head Digital Works. The notices allege that the companies have been underpaying GST by classifying their services as games of skill, which are exempt from GST. However, the DGGI argues that the online gaming companies are actually providing services of chance, which are taxable at a rate of 28%.
The online gaming companies have denied the allegations of GST evasion. They have argued that their services are games of skill and that they are therefore exempt from GST. They have also said that they are willing to cooperate with the DGGI investigation.
₹55,000 crore GST demand ! I am intrigued ki Tax vaalo ke dimaag mein kya chalta hoga aise notice bhejte samay. The only explanation is – kuchh nahi. Monopoly ki game chal rahi hai bas. Na koi tax dega itna – na Sarkar ko milega. Milegi sirf vakilo ko fees jo SC mein ise… pic.twitter.com/BB1b9g3R4E
— Ashneer Grover (@Ashneer_Grover) September 26, 2023