The Finance Ministry informed the Rajya Sabha on Tuesday that 158 cases involving Goods and Services Tax (GST) dues totaling ₹1.53 lakh crore have been registered till January 2025. Minister of State for Finance Pankaj Chaudhary, in a written reply, also revealed that between July 2017 and January 2025, 91 show-cause notices were issued to online gaming companies, amounting to over Rs 1.44 lakh crore in tax demands.
Government's Stand on 28% GST for Online Gaming
The government remains firm that online gaming should attract a 28% GST rate from July 1, 2017, despite opposition from gaming companies. Chaudhary reiterated that, as per the GST Council's recommendations, the valuation of actionable claims in online money gaming is based on the initial deposit made by the player, excluding winnings from previous games.
"Online money gaming is treated as a 'specified actionable claim' under GST, attracting a 28% tax rate," he stated.
Lack of Business Code for Online Gaming in ITR
When asked about the total tax revenue collected from online gaming firms, including real money gaming and e-Sports, Chaudhary clarified that there is no specific business code in the Income Tax Return (ITR) system for online gaming companies. As a result, the tax details of such companies cannot be sourced from their ITR filings. Additionally, under GST, there is no distinct tariff item or service code for online gaming, including real money gaming and e-Sports.
Supreme Court's Interim Relief on GST Notices
The Supreme Court recently stayed show-cause notices issued to 50 online gaming firms and casinos, amounting to over Rs 1 lakh crore. However, it ensured that these notices do not become time-barred during litigation, keeping the matter open for further judicial review.
The ongoing legal and policy disputes around GST on online gaming continue to create uncertainty for industry stakeholders, while the government maintains its stance on taxation policies to curb revenue leakage.
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