The Director General of Goods and Services Tax Intelligence (DGGI) has given tax notice of Rs 21,000 crore on Bengaluru-based Gameskraft Technology (GTPL) for allegedly evading the GST amount.

Gameskraft has dubbed the notice a “departure from the well-established law of the land”. 

This company has to promote online betting through card and fantasy games like Culture, Rummy, Rummy time and Gamezy. In June 2022, the notice was served to the gaming firm for a transaction. The gaming platform provided back-dated invoices to tax authorities to evade taxes. All the authorities have charged 28 per cent GST on betting and calculated Rs 77,000 crore. GTPL has allowed its clients to bet in the form of money on online games. The company was not issued any invoice to its customer on the betting amount. The firm, it has been alleged, is pushing its customers to continue betting as there is no way of a return once the money is added to the wallet.

“We are confident that we will be able to respond to this notice to the authorities’ satisfaction since they have sought to apply 28 per cent tax applicable to games of chance and lottery, instead of the 18 per cent applicable to online platforms of games of skill.”

The GST council has examined the taxation issue concerning online games, which has a high-level ministerial panel to suggest the matter. The Council has to finish its panel report on the issue in October. The panel will decide on a GST rate for horse racing and casino games. It also looks at whether online games of skill should be treated differently from games of chance. The panel had earlier recommended a levy of 28 per cent on gross gaming revenue for online gaming, but it sought more time to submit its final recommendations to the Council.