1165899 SIP myths you must know!

With the finance ministry playing hardball, the game is set to become even harder for online money gaming companies with the Central Board of Indirect Taxes and Customs (CBIC) crunching numbers to find out that as much as Rs 45,000 crore tax could be due from these entities, The Economic Times has reported. The Directorate General of GST Intelligence is preparing to issue notices to these companies.

The basis of the calculation: this is the additional amount that they might need to cough up since the industry was paying GST at 18% since 2017 instead of the 28% set now. Put simply, the industry has paid Rs 45,000 crore less tax than they would have if the 28% rates were put into effect at the time of rollout of GST itself.

“Our internal assessment says that the gaming industry alone has paid Rs 45,000 less tax since the implementation of GST,” a senior CBIC official told the newspaper.

Real money gaming companies dominate the online gaming industry. Since 2017, the industry has paid cumulative tax which is less than Rs 5,000 crore. CBIC estimates peg the actual tax liability to be more than Rs 50,000 crore.

The 28% GST has already resulted in a few companies sack substantial number of employees since they have come to form a dim outlook of the future of their business in India. The new notices can result in many more job losses.

“The latest CGST amendment has made the position very clear in terms of the GST liability of online gaming companies. Every online money gaming company will attract 28% GST and has to pay the balance tax,” a senior CBIC official told the newspaper.

The industry has already urged the government that the hike in GST rates should not be applied retrospectively.

On August 10, the Parliament passed the CGST and IGST legislation amendments that would bring into effect the changes suggested by the GST Council earlier in August.

The government has said that 28% will be the blanket rate that will be applicable including both games of skill and games of chance. The tax will be placed on the full face value of bets. Therefore, companies seem to have little opportunity to avoid payment.

As for the government, it might lend a huge boost to its already healthy GST collectio