The Directorate General of GST Intelligence (DGGI) has issued 12 pre-show cause notices to online real money gaming (RMG) companies over irregularities in their Goods and Services (GST) obligations totaling nearly Rs 55,000 crore. People aware of the matter said that the GST notice for over 25,000 crore has been sent to fantasy gaming start-up Dream11 among others.

According to reports, the Mumbai branch of the DGGI sent out seven or eight pre-show cause notifications to businesses between Friday and Monday asking them to justify why a GST demand shouldn't be made.

More such notices are expected in the coming week. It is anticipated that the DGGI may issue total GST demand from the real money games companies that might touch Rs 1 lakh crore, industry executives have anticipated.

In such cases of GST notices by DGGI, DRC-01 A form is issued by the authority. It is considered a pre-show cause notice in the GST parlance.

According to the referenced individuals, who wished to remain anonymous, those who served the pre-show cause notifications included Play Games24x7 and its affiliates, as well as Head Digital Works. As per ET Dream11 and Head Digital Works declined to comment on the notice served to them.

Dream11 has moved the Bombay High Court against the pre-show cause notice issued to the company. The notices to these businesses are thought to be an outcome of the recent revisions, which saw the GST Council establish new rates of 28 per cent on the total bet put at the beginning of each gaming session, the report underlined.

Prior to the recent notice, another RMG Gameskraft was also given notice of Rs 21,000 crore, which dragged the matter to the Supreme Court. On September 6, the Supreme Court extended a high court ruling that invalidated the GST demand. By the end of the month, the subsequent hearing is anticipated. Gameskraft shut down its super app Gamezy on September 16 because of the notice.