Gamescraft Technology Private Limited (GTPL) has also been accused of promoting online betting through various sports.
The Karnataka High Court today, May 11, quashed the GST notice issued to Bengaluru-based game company, Gamescraft, for alleged tax evasion of Rs 21,000 crore.
With all the uncertainty surrounding the levy of GST on skill-based gaming, the Karnataka High Court today quashed the GST notice dated May 11, issued to Gamescraft, a Bengaluru-based online gaming company, for alleged tax evasion of Rs 21,000 Was. Ten million.
For those unaware, in September last year, Bengaluru-based skill-based game developer Gamescraft Technologies received a show-cause notice from the GST Intelligence Unit for allegedly failing to pay Rs 21,000 crore in GST – which is responsible for its It was the largest claim of its kind. In the history of indirect taxation. According to a Moneycontrol report, the notice covers the period between 2017 and June 30, 2022, and has significant implications for the company.
“We are very happy with the decision of the Karnataka High Court. This is a clear confirmation of our business model. We had and will have full faith in the government and the judiciary. We are hopeful that this decision will pave the way for a constructive dialogue with the GST authorities and lay the groundwork for progressive GST rules for the industry,” said Joyjyoti Mishra, Group General Counsel, Gamescraft.
According to the Bar and Bench, the Single Judge dealing with the matter stayed the notice on September 23, 2022, saying, “If this is not stayed, the petition will become infructuous and as such, I consider it just and pending the disposal of this petition, it is appropriate to stay the notice.”
Moneycontrol reports that Gamescraft Technology Pvt Ltd was also accused of promoting online betting through various games including Rummy Culture and Gamezee. Further, GST officials said that the company did not issue invoices to customers and submitted fake invoices. In addition, the authorities claimed that the skill-based game developer levied 28 per cent tax – amounting to Rs 77,000 crore.
Gamescraft, however, denied the allegations and stated that its products are in the form of skill-based gaming, and only 18% GST is levied on transactions – which is levied during the entry fee.
“The decision of the Hon’ble High Court of Karnataka to uphold the law by allowing the petitions is a reinforcement of the stand of the industry in complying with the existing GST framework under which it is operating. Today’s announcement, along with the recent progressive regulations in the online gaming sector, including notification of rules for online gaming by the Ministry of Electronics and Information Technology (MeitY) and amendments to the Income Tax Act made through the Finance Bill 2023, helps. “To restore the demarcation between online gaming from betting and gambling games,” said Sameer Chugh, Chief Legal Officer, Games24x7.
“Legitimate online skill gaming platforms have stood united as an industry in developing robust and ethical self-regulatory mechanisms and have been forthright in their commitment to run fully compliant businesses governed by the laws of the land. We hope that the legal precedence established in this case will guide future discussions on economic and taxation policies related to the skill gaming industry.”
