As the Supreme Court is set to hear the plea of as many as 71 online gaming companies on January 10, it is understood from sources that the revenue department is likely to seek clarity on the notices it had issued to these gaming companies demanding unpaid GST dues.
Sources told CNBC-TV18 that "the revenue department is likely to seek clarity from the Supreme Court on the prolonging legal validity of ₹1.12 lakh crore GST Show Cause Notices that were issued to the gaming companies."
It is believed that the revenue department is "worried that the delay in action over these show cause notices to online gaming companies May make them time-barred and the government will not be able to realise the demands," sources added.
As per the law, any failure to act on the show cause notices within a set time frame makes those notices void.
In this case, the portion of show cause notices issued by the Directorate General of GST intelligence officers to online gaming companies pertaining to FY18 will expire on Feb 4, 2025, making the demand void. "Given this, if a stay is granted by the Supreme Court then this deadline will get negated till the time there is a formal hearing and solution coming out of the court proceedings," sources added.
The top court is slated to hear a matter where DGGI and the Revenue Department have challenged the Karnataka High Court order which had struck down the show cause notice issued to online gaming company Gameskraft Technology for alleged tax evasion amounting to ₹21,000 crore.
Post this, several other such DGGI show cause notices issued to other online gaming companies demanding past unpaid GST dues were clubbed together from across state High Courts and bunched together to be heard by the top court.
There are as many as 71 such cases where DGGI has demanded dues of about ₹1.12 lakh crore.
It is believed that the "revenue department feels that a stay order by the Supreme Court on Show Cause Notices Will Prolong Legal Validity Of Notices and will help both the government and the industry chart out future course of action," sources added.
To be now seen is whether the court on Friday grants a stay, as demanded by the online gaming companies on January 8.
Source from: https://www.cnbctv18.com/india/finance-ministry-seeks-supreme-court-clarity-on-online-gaming-tax-notices-19537524.htm
