Exclusive: GST slaps biggest ever show cause notice of Rs 21,000 crore to Gameskraft Technology

The Directorate General of GST Intelligence (DGGI) has issued the biggest show cause notice in the history of indirect taxation to a Bengaluru-based online gaming company, Gameskraft Technology Private Ltd (GTPL), reported CNN News 18.

Gameskraft Technology was accused of promoting online betting through card, casual and fantasy games like Rummy Culture, Gamezy, Rummy Time, etc and DGGI has slapped a 28 percent tax on betting amounts of nearly Rs 77,000 crore.

According to the DGGI report, GTPL was engaged in betting by allowing its players to place bets in form of money stakes and it allowed bets on the outcome of card games played online.

During the investigation, DGGI found out that Gameskraft was not issuing any invoices to its customers and submitted fake/back dates invoices, which were caught by forensic examination.

Also, the DGGI said the company was inducing its customers to bet as there was no way of return once money was added to the wallet.

Gameskraft spokesperson said, "Games of skill are a constitutionally protected activity per the Supreme Court and various High Courts across the country. Rummy is one such game declared to be a skill game like horse racing, bridge and fantasy games. Therefore, the notice is a departure from the well-established law of the land."

"As a responsible start-up with Unicorn status in the online skill gaming sector, we have discharged our GST and Income Tax liabilities as per standard industry practice, which is now over a decade old. We are confident that we will be able to respond to this notice to the full satisfaction of the authorities since they have sought to apply 28% tax applicable to games of chance and lottery, instead of the 18% applicable to online platforms of games of skill," the spokesperson added.

Gameskraft was launched in 2017 by a group of passionate gamers to delight the Indian gaming community with skill-based games.