GST Update - Karnataka HC quashes Rs 21,000 crore GST notice - against the Bengaluru based online gaming platform - Gameskraft Technologies Pvt.
CA Hitesh Batra
GST & IDT Consultant | Ex-En Pointe | Ex-Cleartax | Ex-PwC | Nov 2019 | CA | LLB Persuing | MBA (F&T) June 17 | M.Com (F&T) June 16 | Interested in Indirect Tax | 5.5 K Connections | Views are strictly personal
The notice reflected one of the highest disputed amounts in a GST case against any entity.
In September 2022, a GST intelligence unit issued a show-cause notice?to Gameskraft Technology, alleging that the company failed to pay?Rs 21,000 crore in GST, the biggest such claim in the history of indirect taxation.?The notice was for the period between 2017 and June 30, 2022.
Directorate General of GST Intelligence view that the platform is liable to pay a 28% GST on the face value of all collections made. The tax should be levied on the entire bet value and not the revenue accrued to the company.
Gameskraft view that online rummy is a game of skill that does not amount to betting. It had also contested the department's stand on service charge.
Reacting to the high court order, Gameskraft said the verdict was a "clear vindication" of its business model. "We had and continue to have full faith in the government and the judiciary," it said. "We are hopeful that this decision will pave the way for constructive dialogues with the GST authorities and will form the basis of progressive GST regulations for the industry."