{"id":1273857,"date":"2023-09-28T04:32:09","date_gmt":"2023-09-27T23:02:09","guid":{"rendered":"https:\/\/trak.in\/stories\/?p=1273857"},"modified":"2023-09-28T04:32:46","modified_gmt":"2023-09-27T23:02:46","slug":"dream11-gets-rs-40000-crore-tax-evasion-notice-indias-biggest-indirect-tax-claim","status":"publish","type":"post","link":"https:\/\/trak.in\/stories\/dream11-gets-rs-40000-crore-tax-evasion-notice-indias-biggest-indirect-tax-claim\/","title":{"rendered":"Dream11 Gets Rs 40,000 Crore Tax Evasion Notice: India’s Biggest Indirect Tax Claim!"},"content":{"rendered":"\n

Dream 11 has followed the example of Gameskraft as it resorted to legal action against a show cause notice issued by tax authorities in response to allegations of evading GST.<\/p>\n\n\n\n

\"Dream11<\/figure>\n\n\n\n

The tax department has demanded around $150 million from Dream11 for underpaying taxes during 2017-2019, which the company disputes.<\/p>\n\n\n\n

The ongoing dispute<\/strong><\/p>\n\n\n\n

Both parties are arguing over what tax rates should be paid by such gaming platforms.<\/p>\n\n\n\n

Dream11 argues it should pay a tax on fees it charges customers, while Indian authorities are asking for 28% tax on total gaming revenue it makes from players.<\/p>\n\n\n\n

Indian tax inspectors are “alleging that the service” provided by Dream11 “is that of betting\/gambling\/wagering”, court papers stated.<\/p>\n\n\n\n

However, the company claims <\/a>its gaming platform is a “games of skill” and attracts a lower tax rate which should be levied on its earnings, known as platform fees, and not the prize pool.<\/p>\n\n\n\n

Writ petition challenging accusations<\/strong><\/p>\n\n\n\n

Parent company Dream Sports lodged a writ petition in the Bombay High Court, challenging the show cause notice which accuses it of evading GST and failing to pay the 28% GST on the nominal value of bets.<\/p>\n\n\n\n

The report cited sources that the tax allegations are staggering, totaling a massive Rs 40,000 Crores.<\/p>\n\n\n\n

If proven right, this would make it the largest-ever claim in the history of indirect taxation in India.<\/p>\n\n\n\n

The Gameskraft case<\/strong><\/p>\n\n\n\n

The largest claim thus far was the Rs 21,000 Crores show cause notice issued to Gameskraft, a Bengaluru-based company.<\/p>\n\n\n\n

This notice pertained to alleged indirect tax evasion on a betting amount totaling INR 77,000 Crores, covering the period from 2017 to June 2022.<\/p>\n\n\n\n

In response, the company went to the Karnataka High Court, which subsequently dismissed the notice.<\/p>\n\n\n\n

Other similar platforms to be targeted as well<\/strong><\/p>\n\n\n\n

This decision proved to be a precedent, allowing the GST department to issue similar show-cause notices to approximately 40 gaming companies including Dream11.<\/p>\n\n\n\n

Play Games24x7 and its affiliates, including RummyCircle and My11Circle have been served a notice seeking <\/a>GST dues of Rs 20,000 crore while Head Digital Works has been served with a pre-show cause notice of over Rs 5,000 crore.<\/p>\n\n\n\n

The Supreme Court is set to hear the matter again in the coming weeks.<\/p>\n\n\n\n

Final nail in the coffin?<\/strong><\/p>\n\n\n\n

Skill gaming executives and legal experts said <\/a>any unfavourable ruling from the apex court could have a destructive impact on the skill-based gaming industry already suffering from the recently announced 28 percent GST regime.<\/p>\n\n\n\n

Back in July, the GST Council decided to impose 28 percent on the full face value, irrespective of whether it is a game of skill or chance.<\/p>\n\n\n\n

Currently skill gaming platforms pay 18 percent GST on the platform fees, also known as Gross Gaming revenue (GGR).<\/p>\n\n\n\n

Dream11 is at the top of the fantasy sports sector in the country, both in terms of its valuation and the number of users<\/p>\n\n\n\n

Its most recent valuation surpassed $8 billion, boasting a user base of over 180 million<\/p>\n\n\n\n

In the fiscal year concluding on March 31, 2022, it reported a net profit of INR 142 crores, generated from an operating revenue of INR 3,840.7 crores.<\/p>\n\n\n\n

\nhttps:\/\/www.livemint.com\/companies\/news\/dream11-challenges-40-000-cr-gst-evasion-notice-in-bombay-high-court-report-11695719014267.html\n<\/div><\/figure>\n","protected":false},"excerpt":{"rendered":"

Dream 11 has followed the example of Gameskraft as it resorted to legal action against a show cause notice issued by tax authorities in response to allegations of evading GST. The tax department has demanded around $150 million from Dream11 for underpaying taxes during 2017-2019, which the company disputes. The ongoing dispute Both parties are […]<\/p>\n","protected":false},"author":24,"featured_media":1273888,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21],"tags":[3540,3541],"class_list":["post-1273857","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-dream11","tag-indirect-taxation"],"acf":[],"yoast_head":"\nDream11 Gets Rs 40,000 Crore Tax Evasion Notice: India's Biggest Indirect Tax Claim! - Trak.in - Indian Business of Tech, Mobile & Startups<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/trak.in\/stories\/dream11-gets-rs-40000-crore-tax-evasion-notice-indias-biggest-indirect-tax-claim\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Dream11 Gets Rs 40,000 Crore Tax Evasion Notice: India's Biggest Indirect Tax Claim! - Trak.in - Indian Business of Tech, Mobile & Startups\" \/>\n<meta property=\"og:description\" content=\"Dream 11 has followed the example of Gameskraft as it resorted to legal action against a show cause notice issued by tax authorities in response to allegations of evading GST. 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