First Games Technology Faces ₹5712 Crore GST Demand From GST Authorities
First Games Technology Faces ₹5712 Crore GST Demand From GST Authorities
Several gaming companies were earlier sent directives by the department
The Directorate General of Goods and Services Tax (GST) Intelligence, New Delhi, has served a Rs.25712 crore show-cause notice (SCN) to First Games Technology, a subsidiary of One 97 Communications.
Alleging that the online gaming industry underpaid GST from January 2018 to March 2023, the department proposed a 28 percent tax on the entry amount instead of the current 18 percent on platform fees.
The notice under Section 74(1) of the Central Goods and Services Tax (CGST) Act, 2017, Uttar Pradesh Goods and Services Tax (UPGST) Act, 2017, and Section 20 of the Integrated Goods and Services Tax (IGST) Act, 2017, proposed GST demand of Rs.5,712 crores and applicable interest and penalty.
Previously, the GST authorities have sent notices to several gaming companies, and it has been an industry-wide issue. The matter is pending with the Supreme Court, which granted interim relief to the entities by staying further proceedings.
One 97 Communications stated, "In line with the industry, First Games will also file a writ petition challenging the notice, including the retrospective application of the GST amendment of 1 October 2023, and/or the interpretation of the regulation before the amendment.”
The company will seek interim relief at par with others in the gaming industry while challenging the proposed liability and applicable interest and penalties.
