Quick Summary
The Central Board of Indirect Taxes and Customs (CBIC) has evaluated the GST liabilities of the gaming firms in India, and it has been found that they were taxed at 18% on their gross gaming revenue, which was meant for skill-based games, instead of the legally prescribed 28%. This has led to a tax shortfall of approximately Rs 45,000 crore. The distinction between skill-based and chance-based games for tax purposes has been a topic of debate. Some gaming companies argued that their offerings
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FAQ :
Online gaming firms in India are facing a tax demand of approximately Rs 45,000 crore.
The demand is due to a recent amendment to GST laws that mandates a uniform 28% tax rate on the total bet value for all online gaming, removing the previous 18% rate on gross gaming revenue for skill-based games.
Real money gaming firms, which constitute about 77% of the online gaming market, are primarily affected.
The Directorate General of GST Intelligence (DGGI) is in the process of sending notices to these companies to address the tax shortfall.
Yes, the GST Council amended the laws in July to remove this distinction, mandating a uniform 28% tax rate on the total bet value.
CAclubindia
