In its 50th meeting held in July 2023, the GST council decided to levy 28 per cent tax -- the highest slab -- on the full face value of online gaming, bringing it on par with casinos and horse racing. The council had decided against having any distinction between 'games of skill' and 'games of chance'. Earlier online gaming was subject to 18 per cent GST.
This new tax regime came into effect from October 1, 2023.
And later, tax authorities issued notices demanding a GST of Rs 1.12trillion in 2022-23 and the first seven months of 2023-24 excluding interest and penalty.
Soon 30 petitions were filed by real-money gaming companies challenging a demand.
Of these, 27 pleas have been transferred to the Supreme Court from various high courts. The original petition was filed by Head Digital Works, Games24x7, and Baazi Games, while one plea by the GST department challenges a Karnataka High Court verdict.
Last year in September, the Supreme Court stayed Karnataka High Court’s judgment, which quashed a GST notice against online gaming company Gameskraft Technology for alleged tax evasion to the tune of Rs 21,000 crore.
The total GST evasion detected by central GST officers till October, 2023 was Rs 1.51trillion.
CJI Chandrachud had said earlier this year that rather than having different High Courts hear the same issue and potentially deliver conflicting judgments, it would be more effective for the Supreme Court to hear the case and provide an authoritative ruling.
The Centre had also requested the transfer of the petitions from the High Courts to the Supreme Court.
Business Standard
@2024 GST Press. All rights reserved.