In response to the recent surge in show cause notices issued to online gaming startups by tax authorities, the central government has provided clarification to the states regarding the 28% Goods and Services Tax (GST) applied to these platforms. The government asserts that this GST rate is not being imposed retrospectively on online gaming companies.
Consistent Taxation on Online Betting
Revenue Secretary Sanjay Malhotra emphasized that online betting has consistently been subject to a 28% GST rate. Therefore, the tax notices served to online gaming platforms should not be viewed as having a retrospective nature.
Concerns Raised by States
Chhattisgarh Minister TS Singh Deo highlighted that during the GST Council meeting, several states expressed concerns about the demands for dues from certain online gaming platforms, which in some cases exceeded their turnover.
Background on GST Notices
This development follows a recent wave of GST notices sent to online gaming companies, with tax authorities seeking dues totaling over INR 50,000 Crores.
The clarification from the Centre aims to address any ambiguity surrounding the GST rate on online betting and underscores the government’s stance that this tax has always applied consistently.
