Rajasthan High Court stays GST show cause notice issued to MyTeam11

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In an interim order, the Rajasthan High Court has stayed the show cause notice issued to MyTeam11 by the Directorate General of GST Intelligence (DGGI) on December 9, 2022. 

The court also said that DGGI should not take any coercive measures to recover any amount from the petitioners pursuant to the impugned show cause notice till the final decision on MyTeam11’s petition. The company also has to file a reply to the show cause notice within one month. 

Further, in the interim order, the bench said, “based on the initial impression, we are satisfied that some of the games offered by MyTeam11 online have already been held to be games of skill rather than that of chance or that of betting/gambling. Thus, when the matter is so settled by various courts, the issuance of the show cause notice is nothing but an abuse of the process of law.”

MyTeam11 has filed a petition in Rajasthan High Court to challenge a show cause notice served to them under Section 74(1) of the Central Goods & Services Tax, 2017. The notice alleged that “MyTeam11 has avoided tax by undertaking activities in the form of betting and misclassified their supply as service instead of actionable claims which are goods.”

This is not the first show cause notice served by the Directorate General of GST Intelligence (DGGI) to online gaming companies. The tax authorities also served similar notice worth ₹21,000 crore to GamesKraft Technologies in 2022.

Since then, DGGI has questioned 65-70 online gaming companies since October and the frequency has increased till December, according to four businessline sources close to the development. All the top online gaming companies are said to have had these visits from DGGI in the last few months.

Source from: https://www.thehindubusinessline.com/news/sports/rajasthan-hc-stays-gst-show-cause-notice-issued-to-myteam11/article66427753.ece


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