Online gaming & casino retrospective GST cases listed in SC today

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The Supreme Court has listed GamesKraft and batch of matters today before a three judge bench headed by the Chief Justice of India. The Chief Justice in a hearing on Friday indicated that the batch of cases will be listed after the court reopens from summer vacation in July 2024

The listing tomorrow is to seek directions from the bench on the procedural aspects and the matters may be only heard for few minutes.

Gaming companies are contesting retrospective GST notices seeking payments amounting to thousands of crores, calculated at 28 percent of the full face value.

The Supreme Court in April transferred to itself 27 writ petitions which are pending across nine State High Courts, challenging the levy of 28% GST on all forms of online real-money gaming with retrospective effect.

The Centre had sought the transfer of the petitions from the High Courts to the Supreme Court considering all these deal with similar questions.

The Court had also sought a response from the Directorate General of Goods and Services Tax Intelligence in this issue. The petitioners also include Dream 11, Games 24×7, and Head Digital Works.

In September last year, as the Supreme Court imposed a stay on operation of a Karnataka High Court order, the GST field officers issued notices of over Rs 1.12 lakh crore to online gaming companies for alleged tax evasion, prompting legal challenges.

The Karnataka High Court earlier quashed a GST intimation notice of Rs. 21,000 crore while holding that online or electronic or digital rummy played on Gameskraft, a gaming platform, was not taxable as a betting or gambling activity.

Separately, the GST council had, in its meetings in July and August 2023, recommended that online gaming along with casinos and horse racing should be taxed at a uniform rate of 28% on full face value without distinguishing between ‘games of skill’ and ‘games of chance’ which became effective from October 2023. The prospective application is not challenged in the present cases.