Dream11, other eGaming Portals Face Likely Tax Levy on GST

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Dream11, other eGaming Portals Face Likely Tax Levy on GST

Fantasy sports is becoming a rage in India. In fact, Mumbai-based gaming firm, Dream11 is a potential industry leader.  It recently entered the $ 1 billion coveted unicorn valuation category. However, the indirect tax department is considering levying a tax on total bets. At present, these eGaming platforms pay GST on net commissions.

As per some opinions voiced by some high-level executives of these companies, that as per the valuation rules GST is currently being charged on the commission. But,  there is no clarity on whether the GST should be charged on commission or the total revenue.

At the moment, companies like Dream11 are paying 18% GST on their gross commissions.  But the tax department is now looking to lap up an enormous 36 % as GST.

This could spell doom for the now flourishing online gaming industry. Gaming platforms are now seeking Government clarity on setting credible ground rules. They are even considering approaching the Authority of Advance Ruling for clarity. Furthermore, Dream11 and such other Fantasy online gaming platforms are relying on a Punjab High Court judgment to look at it as a skill-based entity where GST is applicable to the gross collection of 28%.

Source: Economictimes.indiatimes.com

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