New Delhi: The Supreme Court on Friday stayed the Goods and Services Tax (GST) show-cause notices, issued to several online gaming companies to the tune of Rs 1.12 lakh crore, providing temporary relief to the sector.


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The apex court stayed all further proceedings with respect to all show-cause notices, issued by the Directorate General of GST Intelligence (DGGI), until the final disposal of the case. The final hearing on the case has been set for March 18.


After the ruling, shares of gaming companies like Delta Corp and Nazara Tech increased up to 7 per cent during the intra-day trade on stock exchanges.


Anuraag Saxena, CEO of E-Gaming Federation (EGF), welcomed the relief granted by the Supreme Court.


"This is a win-win, both for gaming operators who were facing coercive action, and the government whose timelines may now be extended. We are confident about a fair and progressive resolution to this issue, after which we will see investments, employment, and valuations in the gaming sector grow to its full potential," said Saxena.


In 2023, the DGGI sent 71 notices to gaming companies, accusing them of evading GST worth Rs 1.12 lakh crore during 2022-23 and the first seven months of 2023-24, excluding interest and penalties.


The notices were issued under Section 74 of the GST Act, which allows the department to impose a penalty of up to 100 per cent of the tax demand, the total liability could exceed Rs 2.3 lakh crore, including interest.


In August 2023, the GST Council amended the law which stated that all online games involving bets, irrespective of skill or chance, would attract a GST rate of 28 per cent on the full value of the bets placed, and not on the gross gaming revenue, from October 1 the same year.