The platform is alleged to provide back-dated invoices to the tax authorities in order to evade taxes
The Director General of Goods and Services Tax Intelligence (DGGI) issued a hefty tax notice of Rs 21,000 crore to Bengaluru-based Gameskraft Technology (GTPL) for purported GST evasion on the betting amount. Gameskraft has taken the notice as a “departure from the well-established law of the land.”
The company is accused of promoting online betting through cards, casual and fantasy games like Rummy Culture, Gamezy and Rummy Time. The gaming firm was given notice for transactions that happened between 2017 and June this year. The platform is alleged to provide back-dated invoices to the tax authorities in order to evade taxes.
The authorities have charged 28 per cent GST on the betting amount, which was reported to be around Rs 77,000 crore. Purportedly, GTPL has also allowed its clients to place bets in the form of money on online games. Though the company didn’t issue any invoice to its customer for the betting amount.
It was alleged that once the money was added to the wallet, there was no option to withdraw it. This compelled customers to continue betting with the firm. The games of skill are constitutionally protected as per rulings from the apex court and various high courts, a Gameskraft spokesperson on Sunday night said.
“Rummy is one such game declared to be a skill game like horse racing, bridge, and fantasy games. Therefore, the notice is a departure from the well-established law of the land. As a responsible start-up with a unicorn status in the online skill gaming sector, we have discharged our GST and income tax liabilities as per standard industry practice, which is now over a decade old,” said the spokesperson.
“We are confident that we will be able to respond to this notice to the full satisfaction of the authorities since they have sought to apply the 28 per cent tax applicable to games of chance and lottery, instead of the 18 per cent applicable to online platforms of games of skill,” the spokesperson added.