The Directorate General of GST Intelligence (DGGI) has issued pre-show cause notices to around 12 online real money gaming companies over their tax dues worth Rs 55,000 crore, The Economic Times (ET) reported on Tuesday. Dream11, the gaming unicorn, has reportedly received the largest tax notice for dues worth Rs 25,000 crore.
Notably, a pre-show cause notice is served before the income tax department serves a show-cause notice to the companies to inform them about the quantum of their dues. Other companies, which according to ET, have received the notices include Head Digital Works and Play Games 24*7. Experts quoted in the report said that the total quantum of all the notices may touch Rs 1 trillion. These notices are being issued after the GST rates for real money games increased to 28 per cent on the total bet placed at the entry level. The change is set to be effective on October 1.Dream11 has moved the Bombay High Court against the pre-show cause notice issued to it.