Online Gaming: Gaming company has no relief from GST, Supreme Court bans High Court’s decision
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Online Gaming: The Supreme Court has stayed the Karnataka High Court order quashing the Goods and Services Tax (GST) department’s notice of demand of Rs 21,000 crore from an online gaming platform. A bench of Chief Justice DY Chandrachud and Justices JB Pardiwala and Manoj Mishra on Wednesday issued notice to Karnataka-based online gaming company Gamescraft on a plea by the Director General of GST Intelligence and sought response.
The apex court fixed the next hearing in the matter after three weeks. The GST official had challenged the May 11 order of the Karnataka High Court which had said that ‘Rummy’ is not gambling, whether it is played with or without stakes. The High Court had held that Rummy, whether played online or live, is a game of skill and not a game of luck, therefore online Rummy and other digital games played on the Gamescraft platform are classified as ‘betting’ and ‘gambling’. are not liable to be taxed as such.
GST officials had issued a notice to Gamescraft on September 8 last year and demanded Rs 21,000 crore. The company challenged the notice in the High Court. On September 23, 2022, a single bench of the High Court had stayed the notice of the GST department.
How much GST is applicable on online gaming?
The GST Council, in its 50th meeting on July 11, 2023, approved a proposal to levy 28% GST on online gaming, casino and horse racing. According to this decision, 28% GST will be charged on the full value of betting in online gaming, casino and horse racing. This decision will be applicable from October 1, 2023.
The GST Council took this decision because it believed that online gaming, casino and horse racing are forms of gambling and should be taxed. However, some states have opposed this decision. Delhi, Goa and Sikkim have demanded review of this decision. The GST Council has decided that it will review this decision after 6 months.
The GST Council cited several reasons for taking this decision. First, to ensure that recreational activities such as online gaming, horse racing and casinos are taxed equitably. Second, to ensure that the revenue generated from industries such as online gaming, horse racing and casinos can be used for the development of the country.
This decision has been opposed by both the gaming industry and the players. The gaming industry has said that this decision will harm the industry and make players more expensive. The players have said that this decision is a violation of their right to entertainment.
The GST Council cited several reasons for taking this decision. First, to ensure that recreational activities such as online gaming, horse racing and casinos are taxed equitably. Second, to ensure that the revenue generated from industries such as online gaming, horse racing and casinos can be used for the development of the country.
This decision has been opposed by both the gaming industry and the players. The gaming industry has said that this decision will harm the industry and make players more expensive. The players have said that this decision is a violation of their right to entertainment.
The GST Council cited several reasons for taking this decision. First, to ensure that recreational activities such as online gaming, horse racing and casinos are taxed equitably. Second, to ensure that the revenue from industries such as online gaming, horse racing and casinos can be used for the development of the country.
This decision has been opposed by both the gaming industry and the players. The gaming industry has said that this decision will harm the industry and make players more expensive. The players have said that this decision is a violation of their right to entertainment.
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