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28% GST: EGF & A23 petition challenging CGST 2017 provisions to be heard tomorrow by CJI bench

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The writ petition by Industry Association E-Gaming Federation (EGF) and money gaming platform A23 before the Supreme Court challenging the provisions of CGST 2017 will be heard tomorrow i.e., December 15 . The matter is listed before a three judge bench headed by the  Chief Justice.

As earlier reported, this petition pertains to challenge of CGST Act, 2017 provisions and the CGST Rules as they existed before the recent amendments and the retrospective interpretation of 28% GST provisions by the department. EGF is already one of the respondents in the pending appeal by the DGGI in the GamesKraft matter.

In court filings accessed by G2G, EGF said a fresh cause of action has arisen since show-cause notices have been issued to its members and new issues have been raised in the present petition including the constitutional validity of the provisions of the CGST Act. The demand for A23 is close to Rs. 6,500 crores.

Currently, similar cases are pending across the High Courts and the central government is expected to file transfer petitions with the Supreme Court.

It may be noted that several online real money gaming as well as casino companies have received show cause notices from the GST department claiming tax on the full face value of bets or entry fee at the rate of 28% for the period 2017-22, instead of Gross Gaming Revenue (GGR) on which the industry has been paying the taxes. The total value of show cause notices issued to over 40 online gaming and casino companies reportedly exceeds Rs. 2.50 lakh crores, which is several times higher than the reported turnover of these companies for the period.

The outcomes of the legal challenges to the show cause notices is keenly awaited by the industry. The present petition by EGF and A23 is expected to be tagged with GamesKraft matter.

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