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Supreme Court stays Karnataka HC order on Gameskraft tax evasion case

New Delhi, Sep 6, 2023 

The high court had quashed the Directorate General of GST Intelligence's order alleging tax evasion of Rs 21,000 crore in May this year 

The Supreme Court (SC) on Wednesday quashed Karnataka High Court's order that quashed the Rs 20,989-crore show-cause notice against Bengaluru-based online gaming company Gameskraft Technologies (Gameskraft) for alleged goods and services tax (GST) evasion.

According to CNBC-TV18, the apex court said that there is much in the HC order that needs consideration.

The high court had quashed the Directorate General of GST Intelligence's order in May this year.

The authorities had issued the notice in September last year. It alleged that GamesKraft escaped goods and services tax (GST) payment to the tune of Rs 21,000 crore between 2017 and June 30, 2022.

It added that Gameskraft allowed its clients to place money bets on online games, saying the company was promoting online betting through card, casual, and fantasy games like Rummyculture, Gamezy, and Rummytime.

Authorities had, therefore, slapped a 28 per cent tax — which is applicable on games of chance/betting and gambling — on the firm on a betting amount of about Rs 77,000 crore.

Officials said Gameskraft was pushing customers to continue betting because there was no way of going back once the money was added to their wallet.

Later in June, the revenue department decided to move the SC against the HC order.

"The legal team has studied the high court's order to decide the possible course of action. The department is quite clear that the notice followed a thorough investigation. So the department will be soon moving a petition in the apex court against the high court order," a government official privy to the discussion had then told Business Standard.

On Wednesday, the apex court also directed Gameskraft to file a response to the plea filed by the Centre. The Centre's plea will be heard in three weeks.

[The Business Standard]

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