- Major gaming firms seek Supreme Court review of 28% GST levy on online real-money gaming
- Play Games24x7 and Junglee Games have filed petitions; others likely to follow
- Petitions argue GST should apply only to winnings transfer, not entry payments
Major online gaming companies have moved the Supreme Court seeking a review of its recent verdict that upheld the levy of 28% Goods and Services Tax (GST) on online real-money gaming, a ruling that paved the way for tax demands worth around Rs 1.5 lakh crore.
Gaming industry sources told NDTV Profit that Play Games24x7 and Junglee Games have already filed review petitions, while several other online gaming companies are expected to follow.
The review petitions argue that the Supreme Court ought to have referred the matter to a larger Constitution Bench, given the significant legal questions involved.
The gaming companies have contended that the court erroneously permitted the levy of GST on the creation of actionable claims, instead of limiting the tax to the transfer of winnings.
According to the review plea, GST should apply only when winnings are transferred to players and not merely upon payment of the entry amount to participate in a game.
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The petitions also allege that the Supreme Court misinterpreted the "sunrise clause" introduced through amendments to the GST law, resulting in the provisions being applied retrospectively.
The companies have argued that the 28% GST regime for online gaming should apply only from October 2023, when the amended legal framework came into effect, and not for prior periods.
Another key ground raised in the review petitions is that the judgment creates an inconsistent treatment between online and offline gaming, despite both involving similar underlying activities.
The review petitions come after the Supreme Court recently upheld the validity of the 28% GST levy on online gaming, rejecting challenges by gaming companies and effectively reviving tax demands estimated at around Rs 1.5 lakh crore.
The review proceedings are expected to be closely watched by the online gaming industry, as they could determine whether the apex court reconsiders the scope and applicability of one of the country's biggest indirect tax disputes.
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