Show cause notices to e-gaming cos as per legal provisions, GST demand based on data analysis: CBIC chief

CBIC issues show cause notices to e-gaming companies for alleged GST evasion. 28% GST to be levied on online gaming, casinos and horse racing from October 1. GST Council had approved amendments in law to include online gaming, casinos and horse racing as taxable actionable claims.

E-gaming companies have been issued show cause notices for alleged GST evasion as per legal provisions, the head of Central Board of Indirect Taxes and Customs (CBIC) Sanjay Kumar Agarwal said on September 28, adding that the tax demanded is based on analysis of data.

He also said that the government is fully prepared to implement from October 1 the amended provisions for levying a 28 per cent tax on online gaming, casinos and horse racing along with mandatory registration of offshore online gaming platforms.

In its meetings in July and August, the GST Council had approved amendments in law to include online gaming, casinos and horse racing as taxable actionable claims, and clarified that such supplies would attract 28% Goods and Services Tax (GST) on full bet value.

Parliament last month passed amendments to the Central GST and Integrated GST laws to give effect to the Council's decision.

Since then, online gaming companies like Dream11 and casino operator Delta Corp have received show cause notices from taxmen for non-payment of GST at 28% on the full face value of bets placed on their platform.

"The show cause notice which is going is as per legal provision... The department is taking a uniform stand in the interpretation of the law and accordingly show cause notices are being issued," Mr. Agarwal told reporters.

Asked about the quantum of taxes that are due from these e-gaming companies, Agarwal said, "It is very difficult for me to say there are many companies. Data is being collected and wherever the data is received, the department has issued show cause notice".