Central govt to appeal to SC against Karnataka HC order in GamesKraft Rs 21,000 cr case

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Central government is reportedly contemplating to appeal against the Karnataka High Court quashing a GST notice of Rs 21,000 crore against GamesKraft, reported CNBC.

While so, the GST Council is scheduled to take up the issue for discussion in any of the upcoming meetings. The next meeting is scheduled this month. A group of ministers headed by Meghalaya CM Conrad Sangma submitted a report on tax rate but left the valuation aspect to the Council to decide.

The GST department had initiated the action against skill gaming operator GamesKraft last year and the gaming company soon filed a plea with the Karnataka High Court seeking to quash the notice in which the decision was delivered recently.

Soon after the decision, Gameskraft and its founders Vikas Taneja and Prithvi Raj Singh have filed caveats in the Supreme Court through law firm PLR Chambers.

While unequivocally and unambiguously rejecting the GST department’s contention, a single judge of the High Court in its 325-page landmark judgment noted that offering of online rummy or other skill games with or without stakes did not amount to gambling or betting and that the show cause notice was illegal, arbitrary and without jurisdiction or authority of leave and deserved to be quashed.

In a similar action, Haryana’s excise and taxation department has issued a notice of Rs 1,500 crore to Gurugram-based Probo Media Technologies Private Limited that owns and operates reward-based opinion and idea sharing app last month.

The notice has accused the Probo of misclassifying its services. The GST is applicable 100% on the face value of bet and the tax rate on chance of winning in betting, gambling, or horse racing in race club is 28% of gross amount. For games of skill, GST is applicable at 18% on platform fees only. For Probo and GamesKraft, the stand of the department is that the games offered amounts to gambling.