DGGI 55000 Crore Tax
The Directorate General of GST Intelligence (DGGI) has sent out a dozen pre-show cause notices to online real money gaming (RMG) companies over goods and services tax dues of about Rs 55,000 crore, said people with knowledge of the matter. These include a GST notice of over Rs 25,000 crore to fantasy sports platform Dream11, possibly the largest indirect tax notice served in the country, they said.
With more notices expected in the coming weeks, the total GST demand raised by DGGI from RMG companies might touch Rs 1 lakh crore, said industry executives.
An intimation of tax ascertained as payable through the DRC-01 A form is issued by the authorities. Called a pre-show cause notice in GST parlance, it is issued before the department serves a show cause notice.
Those served the pre-show cause notices include Play Games24x7 and its affiliates, and Head Digital Works, said the people cited, who did not wish to be identified.
DGGI 55000 Crore Tax
Dream11 and Head Digital Works declined to comment on the matter. ET’s queries emailed to other companies involved didn’t elicit a response till press time.
According to industry sources, Dream11 has moved the Bombay High Court against the pre-show cause notice issued to it.
The notices were issued after the recent change in GST rates for real money games increased the levy to 28% on the total bet placed at the entry-level of each gaming session on RMG platforms.
While Dream11 has been served a pre-show cause of over Rs 25,000 crore on Monday, a similar notice seeking GST dues of Rs 20,000 crore has been issued to Play Games24x7 and its affiliates, including RummyCircle and My11Circle. A pre-show cause notice raising a demand of over Rs 5,000 crore has been served to Head Digital Works.
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