Rummy Culture, Gamezy firm Gameskraft gets Rs 21,000 cr tax notice from GST

Online gaming that doesn't require the application of any skill is taxed at 28% and the winning amount also forms a part of the taxable component. (Pixabay)

In a biggest-ever show cause notice, the Directorate General of GST Intelligence (DGGI) has slapped a tax demand of Rs 21,000 crore on Gameskraft Technology (GTPL) which runs several online games like Rummy Culture, Gamezy, Rummy Time, etc. The Bengaluru-based online gaming company has been accused of evading a huge amount of taxes. 

The DGGI has now asked Gameskraft to pay GST at 28% on a betting amount totalling Rs 77,000 crore between 2017 and June 30, 2022. According to the reports, the notice is said to be the biggest ever issued to any firm in connection with indirect tax evasion. 

The GST notice came after a forensic examination by the DGGI revealing that Gameskraft did not issue any invoices to customers and submitted either fake or backdated invoices to the department. The probe also found that once a customer added money to their wallet, the firm did not allow the customer to quit.

Online gaming that doesn't require the application of any skill is taxed at 28% and the winning amount also forms a part of the taxable component.

The gaming firm later issued a statement saying that the notice was a departure from well-established law of the land. It claimed that games of skill like horse racing, bridge and fantasy games are constitutionally protected activities as per the Supreme Court and Rummy has been recognised to be a skill game. 

It refuted the claim of any violation of the GST and income tax liabilities. Gameskraft said that they will respond to the notice to the full satisfaction of the authorities.