One of the most popular online betting app companies, Dream11‘s parent company, Dream Sports (Sporta Technologies Private Limited), has received a show cause notice from the Tax authorities of India for not paying 28% GST on the face value of bets. However, the company has challenged this show cause notice in the Bombay High Court.
Dream11 Faces India’s Biggest Indirect Tax Notice Ever
Sources say that Dream11 has received the most prominent ever indirect tax notice in history, surpassing the Rs. 21,000 crore notice of Indirect tax to Gameskraft. As per the sources, The indirect tax claim against Dream Sports is double that and is around 40,000 crores, but as per the Economic Times, they have pegged the number at 25,000 crores. However, Dream Sports has not yet commented on this matter.
The online betting app company has reported a net profit of Rs. 142 crores on an operating revenue of Rs. 3841 crores in FY22.
The tax notice is not only for Dream11, but the Central Board of Indirect Taxes and Customs plans to send show cause notice to over 40 skill gaming companies for tax evasion. All this has come after the Supreme Court upheld a judgment made by the Karnataka High Court for a GST notice against the Gameskraft for tax evasion of nearly Rs. 21,000 crores.