DGGI Detects Tax Evasion Of INR 81K Cr By Gaming Cos In FY24

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SUMMARY

As per DGGI’s annual report for FY24, the online gaming space was most prone to tax evasion during the fiscal under review, followed by the BFSI sector

Overall, DGGI detected 6,084 cases involving an amount of INR 2.01 Lakh Cr worth of GST evasion in FY24, up from 4,872 cases involving INR 1.01 Lakh Cr in FY23. Notably

Last year, multiple online gaming companies received GST notices to cough up INR 1.12 Lakh Cr in pending taxes following the GST Council’s move to impose a 28% GST on such platforms

The Directorate General of Goods and Services Tax Intelligence (DGGI) reportedly detected tax evasion to the tune of INR 81,875 Cr (involving 78 cases) in the Indian online gaming sector in the fiscal year 2023-24 (FY24). 

As per the DGGI’s annual report for FY24, seen by news agency PTI, the online gaming space was most prone to tax evasion during the fiscal under review, followed by banking, financial services, and insurance (BFSI) sector with 171 cases involving tax evasion worth INR 18,961 Cr. 

Overall, the directorate founde 6,084 cases involving an amount of INR 2.01 Lakh Cr of GST evasion in FY24, up from 4,872 cases involving INR 1.01 Lakh Cr in FY23. Notably, the report added that voluntary taxes worth INR 26,605 Cr were paid in the fiscal under review as against INR 20,713 Cr in the preceding year. 

The development comes at a time when the online gaming space continues to be under the radar of tax authorities for alleged evasion. FY24 was the same fiscal year when the GST Council announced a levy of 28% GST on real-money gaming. 

Subsequently in August 2023, the Centre amended the Central Goods and Services Tax (Amendment) Bill, 2023 and the Integrated Goods and Services Tax (Amendment) Bill, 2023. Later, the Parliament approved these amendments. The new rules then came into effect from October 1, 2023

Right after that, multiple Indian online gaming companies received notices to cough up INR 1.12 Lakh Cr in pending taxes. Following this, many platforms including the likes of Gameskraft, Delta Corp, Head Digital Works, Games24x7, and Baazi Games moved various courts, challenging the taxes. 

Owing to these tax demands, the Indian online gaming ecosystem appears to have taken a beating. While many like MPL and Spartan Poker have laid off employees, others such as Striker have shut shop

As per a joint report by EY and US-India Strategic Partnership Forum (USISPF) earlier this year, seven out of 12 surveyed companies saw degrowth or had to face stagnant revenues post the Centre’s 28% GST mandates for online gaming platforms. 

Even as the ecosystem has been hit, the GST collection from the homegrown online gaming industry surged 412% to INR 6,909 Cr in the first six months after the imposition of the 28% GST regime compared to the preceding six months.

Despite this, the Indian online gaming space still presents a huge opportunity for incumbents and new players alike. As per social media major Meta, India’s gaming market is projected to become a $7.5 Bn opportunity and generate 2.5 Lakh jobs by 2025.





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DGGI Detects Tax Evasion Of INR 81K Cr By Gaming Cos In FY24


SUMMARY

As per DGGI’s annual report for FY24, the online gaming space was most prone to tax evasion during the fiscal under review, followed by the BFSI sector

Overall, DGGI detected 6,084 cases involving an amount of INR 2.01 Lakh Cr worth of GST evasion in FY24, up from 4,872 cases involving INR 1.01 Lakh Cr in FY23. Notably

Last year, multiple online gaming companies received GST notices to cough up INR 1.12 Lakh Cr in pending taxes following the GST Council’s move to impose a 28% GST on such platforms

The Directorate General of Goods and Services Tax Intelligence (DGGI) reportedly detected tax evasion to the tune of INR 81,875 Cr (involving 78 cases) in the Indian online gaming sector in the fiscal year 2023-24 (FY24). 

As per the DGGI’s annual report for FY24, seen by news agency PTI, the online gaming space was most prone to tax evasion during the fiscal under review, followed by banking, financial services, and insurance (BFSI) sector with 171 cases involving tax evasion worth INR 18,961 Cr. 

Overall, the directorate founde 6,084 cases involving an amount of INR 2.01 Lakh Cr of GST evasion in FY24, up from 4,872 cases involving INR 1.01 Lakh Cr in FY23. Notably, the report added that voluntary taxes worth INR 26,605 Cr were paid in the fiscal under review as against INR 20,713 Cr in the preceding year. 

The development comes at a time when the online gaming space continues to be under the radar of tax authorities for alleged evasion. FY24 was the same fiscal year when the GST Council announced a levy of 28% GST on real-money gaming. 

Subsequently in August 2023, the Centre amended the Central Goods and Services Tax (Amendment) Bill, 2023 and the Integrated Goods and Services Tax (Amendment) Bill, 2023. Later, the Parliament approved these amendments. The new rules then came into effect from October 1, 2023

Right after that, multiple Indian online gaming companies received notices to cough up INR 1.12 Lakh Cr in pending taxes. Following this, many platforms including the likes of Gameskraft, Delta Corp, Head Digital Works, Games24x7, and Baazi Games moved various courts, challenging the taxes. 

Owing to these tax demands, the Indian online gaming ecosystem appears to have taken a beating. While many like MPL and Spartan Poker have laid off employees, others such as Striker have shut shop

As per a joint report by EY and US-India Strategic Partnership Forum (USISPF) earlier this year, seven out of 12 surveyed companies saw degrowth or had to face stagnant revenues post the Centre’s 28% GST mandates for online gaming platforms. 

Even as the ecosystem has been hit, the GST collection from the homegrown online gaming industry surged 412% to INR 6,909 Cr in the first six months after the imposition of the 28% GST regime compared to the preceding six months.

Despite this, the Indian online gaming space still presents a huge opportunity for incumbents and new players alike. As per social media major Meta, India’s gaming market is projected to become a $7.5 Bn opportunity and generate 2.5 Lakh jobs by 2025.





Source link

Disclaimer

We strive to uphold the highest ethical standards in all of our reporting and coverage. We StartupNews.fyi want to be transparent with our readers about any potential conflicts of interest that may arise in our work. It’s possible that some of the investors we feature may have connections to other businesses, including competitors or companies we write about. However, we want to assure our readers that this will not have any impact on the integrity or impartiality of our reporting. We are committed to delivering accurate, unbiased news and information to our audience, and we will continue to uphold our ethics and principles in all of our work. Thank you for your trust and support.

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