Online money gaming firms, previously positioning themselves as offering skill-based games, face potential additional tax dues of around Rs. 45,000 crore, according to an ET report. The Central Board of Indirect Taxes and Customs (CBIC) has evaluated unsettled GST liabilities for these firms since 2017.
Officials in the ET report explained that these companies were taxed at 18% on gross gaming revenue due to their skill-based games, instead of the legally prescribed 28%, resulting in a Rs. 45,000 crore tax shortfall. The differential tax treatment between skill and chance-based games has been done away with.
The categorization of online growth as either chance-based or skill-based has long fueled debate. Some online gaming companies have argued that their services pertained to skill-based activities, warranting an 18% tax rate instead of the 28% rate for chance-based games. On July 11, the GST Council amended laws to nullify this distinction, mandating a uniform 28% levy on the total bet value.
Source: The Times of India
Share this content: