Dream11 withdraws plea challenging notices issued by tax authorities

The notices pertained to the financial years 2017-18 and 2018-19, accusing Dream11 of failing to pay the 28 per cent of GST on the amount levied for providing gambling services to users.

Fantasy sports platform Dream11 on Wednesday withdrew its petition from the Bombay High Court which challenged the show cause notices issued by the state tax authorities in connection with alleged evasion of Goods and Services Tax (GST) amounting to over Rs 1,200 crores, excluding interest and penalties.

This comes after Additional Government Pleader Jyoti Chavan, appearing for the state authorities, informed the court that the Deputy Commissioner of State Tax Department had taken back the show cause notice issued by them.

Chavan pointed out that the Directorate General of GST was going to send a fresh show cause notice to Dream11.

The notices pertained to the financial years 2017-18 and 2018-19, accusing Dream11 of failing to pay the 28 per cent of GST on the amount levied for providing gambling services to users.

Simultaneously, another online gaming entity, Playerzpot Media Pvt Ltd. found itself in a similar situation.

Playerzpot also approached the court challenging the show-cause notices from the state tax department and the directorate general of service tax (DGGST), which demanded approximately Rs 532 crore of GST along with interest and penalties.

Playerzpot's petition argued that the notices gave retrospective effect to the amendments to the GST Act. These amendments, which took effect on October 1, 2023, imposed a 28 per cent GST rate on online fantasy sports platforms.

It challenged section 15 (5) of the Central GST Act - which gives power to the officers to fix the value of supplies for taxation purposes on the recommendation of the GST council - claiming it was arbitrary as it suffered from excessive delegation.

The bench, comprising Justices GS Kulkarni and Jitendra Jain, responded to the constitutional challenge by issuing a notice to Attorney General R Venkataramani.

Advocate Jitendra Mishra, representing the DGGST, assured the court that the department would refrain from taking any action on the demand notices if the petitioners engaged in the proceedings and submitted their responses to the show-cause notices, without compromising their positions in the writ petition.

The court accepted this assurance and decided to hear Playerzpot's petition for a hearing scheduled six weeks later.

Published By:
Ashmita Saha
Published On:
Dec 6, 2023