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Shiva Joshi, Pune

The Rajasthan High Court has asked the Directorate General of GST Intelligence (DGGI) to impose coercive actions against the Jaipur based company MyTeam11. 

MyTeam11 under scrutiny, case goes to Rajasthan High Court. Image credits: Law Insider India

The DGGI issued a show cause notice against the company alleging that the company is avoiding tax by ‘misclassifying’ the sale of ‘actionable sales’ as services. This further led to the company filing a petition against the said show cause notice. 

According to definitions, Actionable Claims are claims of any debt which do not fall under the purview of GST. However, according to the DGGI notice, the app, MyTeam11, does not offer games of skills but games of chances. That is to say that they promote gambling, betting and lottery systems as games, which very much fall under the purview of GST, and hence, are very much taxable. 

The High Court Bench comprising Chief Justice Pankaj Mithal and Justice Shubha Mehta have asked the DGGI to file a reply to the petition filed by the company within the course of one month, following which the Hon’ble Court will give its final verdict. 

Furthermore, the Bench also observed that some of the games offered by the petitioners have already been proven as games of “Skills” rather than games of “chance”.  Also, the Court also stated that since certain games have already been proven to be based on skills, this notice is nothing but an abuse of the law. 

“Until further orders of the Court, the respondents shall not take any coercive measures to recover any amount from the petitioners pursuant to the impugned show cause notice dated 09.12.2022 (December 12, 2022), provided petitioners file reply to the said show cause notice, if not already filed, within a period of one month from today till the respondents take a final decision in the matter which would be subject to the decision of this petition,” according to the Rajasthan HC order.

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