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Tax reduction for online games company in India

A move has come up which directs a major crackdown on online gaming operators in India, the Directorate General of GST Intelligence (DGGI) has begun the process of issuing notices to all such companies all over the country.

Moreover, according to official sources have claimed that the tax authorities are of the view that online gaming companies in India have allegedly conducted massive tax evasion over the past few years.

“The Bengaluru wing of the DGGI has issued show cause notice to online gaming company GamesKraft Technology Private Ltd for an amount of Rs 21,000 crore,” the source claimed.

“The department is expecting to recover nearly Rs 2.5 lakh crore in taxes from the online gaming companies,” the source added.

Furthermore, the Karnataka High Court has stayed the demand notice and proceedings are underway at the court. Interestingly, the DGGI has confirmed the Court that it is carrying out similar proceedings against the entire online gaming industry in India.

In context to this, GST Council, which is most probably holding its 48th meeting in October, is deliberating the parameters of taxing online gaming, but the key question here arises that whether to tax the entire bet at face value or the net amount after reducing the prize money.

The decision and plan should be made in a proper manner and sequence by the heirarchy.

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