Dream 11, accused of GST evasion, moves Bombay High Court, details here

New Delhi: A writ petition has been filed in the Bombay High Court by the parent company of the Dream11 fantasy games, i.e. Dream Sports (Sporta Technologies Private Limited).

The petition has been filed against the show cause notice issued by the Central Board of Indirect Taxes and Customs of India to Dream Sports for an alleged GST evasion by the company.

The Central Board of Indirect Taxes and Customs of India have alleged that Dream Sports (Sporta Technologies Private Limited), have not paid the fixed GST of 28 per cent on the face value of all the bets placed by the Dream Sporta run app, Dream11.

According to the reports, the show cause notice was served for the undisclosed amount of indirect tax evasion to Dream Sports, which is much higher than the one served to GameAskraft’s Rs 21,000 crore, which is the highest-ever claim in the history of indirect taxation.

According to the sources that are working on the case, the show cause notice served to Dream Sports (Sporta Technologies Private Limited), is almost double that of Gameskraft, and is something around Rs 40,000 crore.

Dream11 receives Rs40k Cr GST Evasion Notice
The tax authorities have reportedly claimed INR 40k crore (around $5.3 billion) against Dream11, making it potentially the largest such claim in India’s history of indirect taxation.
In November 2021 Dream11 was valued at $8bn#Dream11

— Rohit Grover 🇮🇳 (@_rohitgrover) September 26, 2023

The flagship company in the fantasy sports community, Dream11, earlier disclosed a net profit of Rs 142 crore, while operating on a revenue of Rs 3,841 crore in the financial year of 2022, which also makes them one of the most profitable companies in the country.

Earlier this month, according to the reports of Moneycontrol, the Central Board of Indirect Taxes and Customs are likely to send the show cause notice, just like they served to Gameskraft and Dream11, to more than 40 skill gaming-based companies.

All these companies according to the Central Board of Indirect Taxes and Customs, are guilty of GST evasion.

The Central Board of Indirect Taxes and Customs have taken this decision after the Supreme Court of India stayed the Karnataka High Court’s decision to quash the GST notice of Rs 21,000 crore against Gameskraft.

Karnataka High Court quashed DG #GST Intelligence’s order imposing ₹21000 cr tax demand on #Gameskraft alleging that it misclassified offerings as a service instead of filing for actionable claims, which led to a difference of nearly 40 times in the total amt of tax liability.

— Trisha Shreyashi (@TrishaShreyashi) May 12, 2023