Govt plans to file a plea seeking the transfer of all GST-related online gaming cases to the Supreme Court

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The Union government has made a significant move in the ongoing dispute over the retrospective imposition of Goods and Services Tax (GST) on online gaming. On January 8, it pledged to file a petition requesting the transfer of all related cases from various high courts to the Supreme Court.

During the court proceedings, Additional Solicitor General Venkatraman, representing the Union government and the GST department, confirmed the filing of this plea. Renowned senior advocate Harish Salve, appearing for the online gaming firms, and Chief Justice of India DY Chandrachud acknowledged that centralizing these cases in the apex court would ensure consistency. Chandrachud expressed his inclination to approve the transfer once the petition was officially submitted.

Venkatraman emphasized the alignment of all governmental arms in handling the online gaming cases, dismissing reported differences in opinions within the media.

Simultaneously, the Supreme Court issued notices in response to plea by online gaming companies such as Head Digital Works and Games 24/7. These companies challenged the government’s decision to retrospectively impose a 28 percent GST on the total value of bets placed, rather than on the gross gaming revenue.

A prior report from November 2023 by Moneycontrol had hinted at the government’s intention to consolidate all GST-related online gaming cases under a unified principle in the Supreme Court. According to a senior finance ministry official, the goal was to ensure a singular interpretation of the law, given the cases’ concentration on the taxability aspect.

The controversy stemmed from the GST Council’s approval of a 28 percent GST on all online games starting from October 1, 2023. Additionally, it declared that from 2017 until October 1, 2023, all online games involving bets, regardless of skill or chance, were liable to pay a 28 percent GST on the total bet value, citing it as gambling. Consequently, these gaming companies have collectively received GST notices totaling Rs 1 lakh crore this year.

Numerous gaming firms have been at odds with the government regarding this taxation matter. While companies assert that the 28 percent tax applies only from October 1, 2023, the government argues for its application even before that date, asserting that the revision from October 1 simply clarified an existing law.

Presently, cases related to GST notices for online gaming companies and casinos are being heard across different courts, including the Bombay High Court, the Goa bench of the Bombay High Court, and the Sikkim High Court.

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