New Delhi: As the the government implemented the amended goods and services tax or GST law provisions for taxing online or e-gaming, casinos and horse racing, which is effective from Sunday, the gaming companies are not happy with the government's decision on the new law, and they have also sought suspension of the 28 per cent GST notification on e-gaming, according to the sources.
In a letter, the sources said, All india Gaming Federation (AIGF) has asked the revenue secretary, Sanjay Malhotra, to suspend the ammendment notice till all states pass their respective amendments, in line with the judgment of the Supreme Court of India. "AIGF said that it would be a massive challenge for the online gaming companies to operationally adapt to these large-scale changes when there is no uniformity in the statutory framework," the sources added.
As per the government's initial plan, the finance ministry last week had notified the effective date for the implementation of new GST rates from October 1. This was despite some state governments yet to pass the requisite amendments to their respective state GST laws. There are over 15 states which are yet to make changes to their state GST laws and online gaming companies registered in those states are expected to face several challenges in this new law.
However, AIGF CEO Roland Landers is learnt to have said in the letter that these notifications are a "severe blow to the creed of 'one nation, one tax'" and will tear apart "the fabric of GST". AIGF also claimed to have over 120 members including skill-gaming companies and game developers across all formats and genres. Among its prominent members include Mobile Premier League (MPL), Gameskraft, Nazara Technologies, Deltatech Gaming, Head Digital Works (A23) and WinZO among others.
It is also learnt that Dream Sports, the parent company of fantasy sports major Dream11, has filed a writ petition in the Bombay High Court, challenging a show-cause notice issued by tax authorities. Amidst several concerns expressed by its e-gaming co-firms due to implementation of 28 per cent GST from October 1, 2023, Dream11 wants to woo its players ahead of mega cricket World Cup and other games and has explained the rules in its mobile app how deposits work to comply with the government's new rules.
"...but don’t worry, you can still join contests with the entire amount you add. So if you add Rs 100, you will be able to join one or more contests using the full Rs 100. If you add Rs 100 to your account, you will get Rs 78.12 as your deposit Amount, with the GST on that amount being Rs 21.88 (28 per cent of Rs 78.12). However, you will additionally receive discount points worth 28 per cent of your deposit amount, which is Rs 21.88," Dream11 noted.
