Providing a potential relief to gaming companies, the GST Council might consider amending the Central Goods and Services Tax (CGST) Act, 2017, likely removing retro tax on gaming companies.
Introduced by the law committee, this proposal aims to deal with tax notices, where low taxes are paid due to issues with interpretation or unclear provisions in the law.
According to ET report, the law committee has suggested inclusion of new Section 11A to the CGST Act. This section will refrain government from taking GST that was not charged or was undercharged due to prevailing common practices.
But notably, this amendment doesn’t deal with the matter of overpaid taxes.
However, the GST council might have a discussion on these recommendations in their upcoming meeting, scheduled on June 22.
If the recommendation is accepted, it will allow authorities to remove tax demands, that are raised retrospectively, thus providing a huge relief to gaming industry.
Meanwhile, Directorate General of Goods and Services Tax Intelligence (DGGI) has dealt with 6,323 cases of tax evasion in the financial year 2023-24. Among them, online gaming sector has faced most number of tax evasion notices, which amounts to over Rs 1 lakh crore.