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India: Gameskraft served $2.6 billion tax notice by GST authorities

Date: September 26, 2022 Meghna Singh Meghna Singh
India: Gameskraft served $2.6 billion tax notice by GST authorities 
Indian online gaming firm, GamesKraft Technology Pvt Ltd, has reportedly been served a show cause notice by the country’s Goods and Services Tax (GST) authorities, demanding INR 21,000 crore ($2.57 billion) in taxes, penalty, and interest, as per the company's submission to Karnataka High Court.



According to reports, the court has temporarily stayed the notice and is expected hold a hearing after the festive holidays of Dussehra.



In December last year, the country’s GST authorities had raided the company’s premises as well as its linked property and bank accounts, claiming a tax evasion of around INR 460 crore ($56 million).



GamesKraft filed an appeal against the demand as well as attachment of its bank accounts and property. Seeking the court's intervention, the firm has stated that the authorities have issued it a new show cause notice.



In its submission, the company stated the total GST demanded in the disputed intimation notice is approximately INR 21,000 crore ($2.6 billion), including penalty and interest, against the petitioner’s total income between 2017 to 2022, which is somewhere around INR 4,000 crore ($490 million).



The GST department stated that the company was served a notice for allegedly taking part in gambling and betting, and on these charges GamesKraft is liable to pay 28% of the tax that is applicable to lottery and games of chance, as opposed to the 18% that is applicable to online gaming platforms with games of skill.



A spokesperson from GamesKraft stated that the company, as a responsible online gaming startup with a Unicorn status inside the sector, has discharged its GST as well as income-tax liabilities according to the standard industry practice.



The online gaming firm has also supposedly told the court that the notice was issued by an officer who did not have jurisdiction.



Source credit: https://economictimes.indiatimes.com/industry/media/entertainment/bengaluru-gaming-company-gets-rs-21000-cr-gst-notice-reportedly-the-biggest-ever/articleshow/94439405.cms

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Meghna Singh

An English Literature graduate, Meghna Singh ventured into the profession of content development to incorporate her knack for writing articles across verticals including technology, healthcare, business, and alike for News Origins and Newsorigins. She has also completed her MBA in Tourism and worked as a content creator in the field of product development.