India
Show Cause: Sporta Tech petitions Bombay high court against show cause to levy steep GST for ‘gambling’ services | India News
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MUMBAI: Online Fantasy Sports Gaming company, Sporta Technologies Pvt Ltd, filed a petition before the Bombay high court on Monday to challenge and seek quashing of show cause notices served on it this month for a steep Goods and Service Tax bill on grounds that the company offered “gambling’’ services which attract GST at 28 percent. The notices lack jurisdiction, said the petition filed through TLC Legal LLC.
The company said the show causes notices dated September 12 by the Deputy Commissioner of Sales Tax for July 2017-March 2018 and the FY of 2018-19. It has also challenged the probe undertaken by the Sales Tax Commissionerate and the Directorate General of GST Intelligence, Mumbai Zonal Unit.
The petition was served on the State, and is likely to be mentioned for hearing soon. It said the notices lack jurisdiction and fly in the teeth of the Supreme Court judgments in its own case where it was held that Online Fantasy Sports Gaming it provides were predominantly games of skill, not amounting to gambling or betting.
The company said the department seeks to tax the “prize pool contribution, which is an actionable claim, made available by participants to participate in the contest and for distribution amongst themselves based on the outcome of their OFS contest.’’ Saying it is not the supplier of the “actionable claim’’ hence it is not gambling, the petition also sought quashing of summons issued to it to furnish information for the post July 2017.
The company has also challenged section 15 (5) of the CGST/MGST Act for being violative of the fundamental rights of equality, freedom of trade and right to life, under the Constitution and sought a declaration that it suffers from “excessive delegation’’ providing “unbridled and unrestricted power ‘’ to the department to determine the value of the taxable supply.
The company said the show causes notices dated September 12 by the Deputy Commissioner of Sales Tax for July 2017-March 2018 and the FY of 2018-19. It has also challenged the probe undertaken by the Sales Tax Commissionerate and the Directorate General of GST Intelligence, Mumbai Zonal Unit.
The petition was served on the State, and is likely to be mentioned for hearing soon. It said the notices lack jurisdiction and fly in the teeth of the Supreme Court judgments in its own case where it was held that Online Fantasy Sports Gaming it provides were predominantly games of skill, not amounting to gambling or betting.
The company said the department seeks to tax the “prize pool contribution, which is an actionable claim, made available by participants to participate in the contest and for distribution amongst themselves based on the outcome of their OFS contest.’’ Saying it is not the supplier of the “actionable claim’’ hence it is not gambling, the petition also sought quashing of summons issued to it to furnish information for the post July 2017.
The company has also challenged section 15 (5) of the CGST/MGST Act for being violative of the fundamental rights of equality, freedom of trade and right to life, under the Constitution and sought a declaration that it suffers from “excessive delegation’’ providing “unbridled and unrestricted power ‘’ to the department to determine the value of the taxable supply.
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