The Centre on Tuesday informed the Rajya Sabha that GST notices amounting to over ₹1-lakh crore have been issued during the last and this fiscal till date. It also said that that over ₹4.50-lakh crore in terms of GST evasion across various sector were detected in 4 and ½ years.

In a written response to a question by BJP MP Sushil Kumar Modi, Minister of State in the Finance Ministry Pankaj Chaudhary said 71 show cause notices involving GST to the tune of over ₹1.12-lakh crore have been issued to online gaming companies during financial years 2022-23 and 2023-24 (up to October 2023).

“As these notices are pending adjudication, the respective GST demand is not yet determined under the provisions of CGST Act, 2017,” he said.

Contentious issue

GST on online gaming has been a contentious issue. Earlier, online gaming companies supplying actionable claims were levying GST at the rate of 18 per cent on platform fees ranging from 5-20 per cent of the full face value, disputing the 28 per cent levy on actionable claims in the form of betting and gambling supplied in online gaming before various legal fora.

However, GST Council, in its meeting dated July 11, recommended that actionable claims supplied in casino, horse racing, and online gaming are leviable to a GST rate of 28 per cent and recommended to carry out amendments in the law to remove any ambiguity.

In the 51st GST Council meeting held on August 2, a few States requested that the matter be reconsidered and after detailed discussion, the GST Council decided to continue with its earlier recommendation. Later law was amended and then there was spurt in issuance of show cause notices.

Though the government said that amendments in law are clarificatory in nature and it has always maintained that 28 per cent rate is applicable from July 1, 2017, but online gaming companies alleged that amendment in law is retrospective in nature and accordingly show cause notices have been issued. Now, companies are expecting positive response from the Supreme Court when it will take up the Centre’s appeal against Karnataka High Court ruling the matter of show cause to one online gaming coming. As on date there is interim stay.

GST evasion

Meanwhile, in response to the same question, Chaudhary also gave details of GST evasion across all sectors during the last four years and 7 months. Total GST evasion detected was over ₹40 000 crore in 2019-20, out of which around 18500 crore was recovered while 231 persons were arrested. In the current year between April and October over ₹1.5-lakh crore of GST evasion detected. However only around ₹18,500 crore has been recovered. Total arrests during the current fiscal were 154.

The Centre has initiated many steps to curb GST evasion. These include using robust data analytics and artificial intelligence to identify and track risky taxpayers and detect tax evasion.

Also, a nationwide special drive was carried out against unscrupulous entities for availing and passing on input tax credit (ITC) fraudulently on the strength of fake/bogus invoices. Further, availment of ITC has been restricted to invoices and debit notes furnished by the supplier in their statement of outward supplies.