Government issues ₹1 Lakh crore tax notice to online gaming firms

The Indian government has taken significant action against online gaming companies, issuing show-cause notices worth a staggering ₹1 lakh crore (approximately $13.5 billion) for alleged tax evasion. This move comes in the wake of more than 100 online gaming applications being investigated for tax evasion, totaling around ₹1 lakh crore.

Several prominent companies, including Dream11, Gameskraft, and Delta Corp, have faced show-cause notices for alleged underpayment of taxes, with Delta Corp now confronted with a GST notice for short payment of tax amounting to ₹6,384 crore, bringing their total tax demand to over ₹23,000 crore. GamesKraft also received a show-cause notice in September last year, alleging GST evasion of ₹21,000 crore.

This action resulted from changes in the Goods and Services Tax (GST) framework, specifically the imposition of a 28 percent GST on the entire value of bets placed on online gaming platforms in August. The finance ministry's amendments to the integrated GST now necessitate offshore online gaming platforms to register in India and adhere to domestic tax laws. However, it's worth noting that, despite these rigorous measures against Indian gaming companies, there is currently no data indicating the registration of foreign gaming companies in India since October 1.