Over 100 online gaming firms under scrutiny for GST evasion
What's the story
Authorities are set to launch investigations against over 100 online gaming firms for potential Goods and Service Tax (GST) evasion, as reported by Business Today.
This course of action comes after the Supreme Court reversed the Karnataka High Court's decision regarding a Rs. 21,000 crore GST demand from an online gaming platform, Gameskraft.
The probe will focus on companies with a money component involved in gaming activities.
Insights
Karnataka HC halted GST demand against Gameskraft
The company challenged the notice in the Karnataka High Court, where a single judge temporarily stopped the GST department's notice on September 23, 2022, citing various issues in the case.
Later, the online gaming company went back to the High Court, claiming that despite the stay order, authorities had unfairly and deliberately issued a show-cause notice on the very same day as the High Court's decision on September 23, 2022.
Insights
SC overturned HC's decision
Now, the Supreme Court reversed the Karnataka High Court's decision to nullify the GST department's intimation notice, which sought Rs. 21,000 crore from an online gaming platform called Gameskraft.
A bench comprising Chief Justice D Y Chandrachud, Justices J B Pardiwala, and Manoj Mishra has summoned a response from Gameskraft regarding a plea filed by the Directorate General of Goods and Services Tax Intelligence.
Insights
Authorities to scrutinize over 100 online gaming firms
Speaking to Business Today, a senior official said, "There are over 100 companies registered domestically with online gaming federations. We will start looking into the activities of these companies to check whether there has been any evasion of GST."
He added that only those firms that have a money component involved in gaming activities will be checked.
Insights
Gameskraft confident in judicial process amid investigation
In response to the development, Gameskraft said, "We have noted the interim order of the Supreme Court. We, along with the skilled gaming industry associations, will put forth our submissions before the Supreme Court in the coming weeks."
"We have full faith in the judiciary and are confident that the Supreme Court will reaffirm the settled law of over five decades once again and vindicate our and the industry's position," the company's statement read.