At a time when a number of online gaming companies have been slapped with GST notices by the tax authorities, the Directorate General of Goods and Services Tax Intelligence (DGGI), Mumbai Zone has now reportedly issued an INR 28,000 Cr GST notice to online gaming startup Dream11.
Sources aware of the matter told CNBC-TV18, that besides Dream11, DGGI Mumbai has also sent a notice to Play Games 24X7, which operates Games24x7, for INR 21,000 Cr.
Over the last few weeks, a number of online real money gaming (RMG) startups have received show cause notices from the DGGI.
Last month, Dream11 and several other gaming companies, including Games 24×7 and Head Digital Works, took the legal route and moved to court on receiving show cause notices from the DGGI. The tax claim amount against Dream11 was pegged to the tune of INR 25,000 Cr-INR 40,000 Cr by multiple media reports.
Dream11 declined to comment on any developments pertaining to the new GST evasion notices and the ongoing legal battle. An email sent to Play Games 24×7 did not elicit a response till the time of publishing the article.
In its notice, the DGGI Mumbai Zone has reportedly accused Dream11 of failing to submit the required documents despite multiple reminders.
Sources told the publication that following this, a detailed inspection was carried out by the DGGI on September 14. Dream11 has now submitted the documents in the form of GST DRC 01 for FY18 and FY19, which was issued by the state government of Maharashtra on September 12.
It must be noted that Maharashtra GST audit authorities had also served Dream11 with a notice demanding a sum of INR 18,000 Cr recently.
The problems began after the GST Council raised the tax imposed for real money games to 28% in July this year, which is now to be levied on gross revenue or total prize pool.
The amended provision came into effect from October 1.
Last month, a report said that online gaming companies are likely to receive tax notices of around INR 1 Lakh Cr from the DGGI.
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