Gameskraft GST matter to be tentatively listed on December 15 as per Supreme Court website

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The revenue department appeal in Gameskraft matter will now tentatively be heard on December 15, 2023 by a bench headed by Chief Justice of India (CJI) as per the Supreme Court website. We earlier reported that the scheduled hearing on October 10 could not take place due to constitutional bench matters in which CJI is also a part.

The matter which was initially postponed for October 31, 2023, has been postponed once again with a new date now set for December 15, 2023, as per the Supreme Court’s automated computer-generated system for listing cases. It is worth noting that the computer-generated system earlier reflected November 20, 2023 as date of tentative listing.

The Gameskraft GST matter has garnered attention as it involves a substantial sum of Rs. 21,000 crores (approximately US$2.5 billion) show cause notice issued to the online rummy platform, Gameskraft. The Directorate General of GST Intelligence (DGGI) has been arguing for the enforcement of this notice.

In the previous hearing, the DGGI successfully obtained a stay against the Karnataka High Court’s decision to quash the notice. Subsequently, several gaming companies across the country and casino operators in Goa and Sikkim were issued notices for the recovery of tax based on the full face value of their operations.

Aggreived by the notices, gaming companies have approached various High Courts. Currently, petitions challenging the GST notices are pending with the High Courts of Bombay, Sikkim, Gujarat, and Uttar Pradesh.

As per reports, the tax department intends to seek transfer of all pending High Court cases to the Supreme Court, which will conclusively decide the issue of retrospective taxation and whether online skill-based games amount to gambling and betting.

The crux of all these matters lie in the interpretation of the revenue department, which contends that the online rummy platform’s activities amount to ‘gambling and betting’ under GST laws due to the option to place stakes on skill-based games. Gaming companies argue that argue that such an interpretation would be detrimental to the sector, as the tax amount in question far exceeds its overall revenues.