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The government has served notices to multiple online gaming companies demanding taxes amounting to Rs 1 lakh crore that they have allegedly evaded. The notices come months after the government decided to impose a 28% GST on casinos and online games.
“The amount for which show cause notices have been issued to online gaming companies is around 1 trillion rupees,” news agency Reuters cited a government source as saying.In August, theGST Council comprising finance ministers of the Centre and states, made the decision to levy 28% GST on online gaming, casinos and horse racing as taxable actionable claims.
The industry raised concerns about the applicable tax rates, and some firms like Mobile Premier League laid off employees. The 28% GST rate was decided to be in place starting from October 1, as per the law.
GST rules for online gaming
During its last monsoon session, the Lok Sabha passed amendments to two Goods and Service Tax (GST) laws that were aimed at introducing a 28% GST rate for online gaming, casinos and horse racing.
The GST Council also recommended adding specific provisions to the Integrated Goods and Services Tax (IGST) Act, 2017. According to the changes to the Central GST Act, 28% tax would be levied on the full face value of bets placed on online sites.
All “actionable claims” similar to lottery, betting and gambling will be subject to 28% GST on the full face value of bets.
At that time, Union Finance Minister Nirmala Sitharaman said that the decision was not intended to kill the industry but was taken considering the “moral question” that it cannot be taxed at par with essential commodities.
Furthermore, the amendments to the Integrated GST (IGST) Act also made it mandatory for offshore online gaming platforms to register in India and pay taxes in accordance with the law.
“The amount for which show cause notices have been issued to online gaming companies is around 1 trillion rupees,” news agency Reuters cited a government source as saying.In August, theGST Council comprising finance ministers of the Centre and states, made the decision to levy 28% GST on online gaming, casinos and horse racing as taxable actionable claims.
The industry raised concerns about the applicable tax rates, and some firms like Mobile Premier League laid off employees. The 28% GST rate was decided to be in place starting from October 1, as per the law.
GST rules for online gaming
During its last monsoon session, the Lok Sabha passed amendments to two Goods and Service Tax (GST) laws that were aimed at introducing a 28% GST rate for online gaming, casinos and horse racing.
The GST Council also recommended adding specific provisions to the Integrated Goods and Services Tax (IGST) Act, 2017. According to the changes to the Central GST Act, 28% tax would be levied on the full face value of bets placed on online sites.
All “actionable claims” similar to lottery, betting and gambling will be subject to 28% GST on the full face value of bets.
At that time, Union Finance Minister Nirmala Sitharaman said that the decision was not intended to kill the industry but was taken considering the “moral question” that it cannot be taxed at par with essential commodities.
Furthermore, the amendments to the Integrated GST (IGST) Act also made it mandatory for offshore online gaming platforms to register in India and pay taxes in accordance with the law.
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