Gaming Companies to Benefit from Retro Tax Waiver, Alleviating Rs 1 Lakh Crore Tax Burden
By: Admin
June 26, 2024
Categories: GST Recent News
4 Min Read
The Goods and Services Tax (GST) council has proposed an amendment that would grant the government the authority to override retrospective tax demands, a move that could potentially address pending indirect tax cases valued at approximately ₹1 lakh crore against companies in India’s lucrative real money gaming (RMG) sector. However, legal experts and industry leaders caution that this is merely the first step in resolving issues related to such tax demands.
The RMG sector has been under the looming threat of retrospective tax payments, which could amount to several times their revenues. Prominent firms such as Gameskraft, Dream 11, Games 24×7, and Head Digital Works are collectively facing GST demands of around Rs 1 lakh crore, according to estimates. The ability of the government to override these pending taxes could significantly decrease the financial risk for these companies.
Despite the optimism, lawyers and executives urge restraint in celebrating the proposal. They point out that this is just the initial step, as the GST Act previously lacked a provision for the government to overrule retrospective tax demands. This recommendation is being made broadly for all industries, including airlines and telecom.
The proposal is expected to be debated during the interim budget session before it can be implemented. Given the coalition government at the Center, the process may not be straightforward. If the recommendation is incorporated into the act, the GST council would need to recommend the application of the new amendment to the RMG industry, which would require further discussion.
In the meantime, a consolidated pending tax case involving about 30 parties, including RMG firms like Gameskraft, Head Digital Works, and Play Games 24×7, brought by the Director General of GST (DGGST) and other tax authorities, is ongoing in the Supreme Court. The next hearing is scheduled for July 15.
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