India slams gaming firm with $150m in taxes

According to legal filings, India’s tax authority has requested $150 million from Dream11, a gaming company financed by Tiger Global, for underpaying taxes from 2017 to 2019. Dream11 has contested the claim, while officials continue to look into Dream11’s payments for another four years, ending in March 2023.

The gaming company, which have grown immensely famous for the fantasy cricket games it provides, is in a dispute with the Indian tax authorities over what tax rates is fair companies in that industry should pay. While Indian authorities are insisting on a 28% tax on the entire gaming revenue, Dream11 argues that it should only have to pay a tax on the fees charged to users.

Another point of contention as seen in court documents, is that while tax inspectors claim that the service offered on Dream11’s platform primarily involves betting/gambling/wagering, the company argue that its gaming platform is a “game of skill,” and should attract a lower tax rate on its earnings (platform fees).

On September 12, the company received a 30-days ultimatum from the tax authorities, who demanded the firm to provide reasons why it shouldn’t be mandated to pay a shortfall of 2.1 billion rupees ($26.07 million) for 2017–18 and 10 billion rupees ($120.85 million) for 2018–19, plus interest and a penalty.

According to court documents, Dream11 has responded by suing the government, contesting the notices and the issue will be heard in court in the very near future.