The Goods and Services Tax (GST) Council is reportedly considering an amendment to the Central Goods and Services Tax (CGST) Act, 2017, that would quash retrospective tax demands. Seen as a potential relief to the online gaming sector, this proposal aims to address tax notices issued where lower taxes were paid due to interpretation issues or lack of clarity in the law.
According to a news source, the introduction of a new Section 11A to the GST Act has been recommended by the law committee. The new section will hold back the government from recovering GST that was not levied or was under-levied due to prevalent general practices.
On June 22, the GST Council will think upon this recommendation. If approved, this amendment would enable authorities to quash tax demands raised retrospectively, offering significant relief to the online gaming industry.
On the other hand, the amendment will not address the issue of overpaid taxes. The excess GST paid by the companies due to these practices will not be eligible for refunds.
In the financial year 2023-24, the Directorate General of Goods and Services Tax Intelligence (DGGI) detected 6,323 cases of tax evasion amounting to Rs 1.98 lakh crore. Of these, the online gaming sector had the highest number of tax evasion notices, totaling over Rs 1 lakh crore.
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