Supreme Court To Decide On 28% GST For Online Gaming Companies This Week
Gaming platforms including Dream11, Gameskraft, and MPL have challenged retrospective GST claims after the Centre reclassified online real money gaming under the 28% tax slab in 2023.
The Supreme Court is set to conclude hearings on the online gaming GST dispute by Thursday. A bench led by Justice J.B. Pardiwala will hear closing submissions from petitioners on Tuesday and Wednesday before deciding the fate of over 27 online gaming companies under scrutiny from tax authorities.
The case will determine whether these companies must pay 28% goods and services tax on the full value of bets, either prospectively or retrospectively. Until 2022, gaming platforms paid 18% GST only on platform fees or commissions. In August 2023, the Centre amended the Central GST Act to classify real money online gaming as gambling, placing it under the 28% tax slab.
Following the amendment, online gaming firms received show-cause notices demanding taxes exceeding Rs 1.3 lakh crore on amounts collected from players in previous years. The companies are contesting the retrospective application of the higher tax rate.
The court has clubbed around 27 petitions filed by companies including Gameskraft, Dream11, MPL, PokerBaazi, Junglee Rummy, and A23, as well as industry associations such as the All India Gaming Federation, E-Gaming Federation, and Federation of Indian Fantasy Sports.
Senior advocates Abhishek Manu Singhvi, Harish Salve, and Mukul Rohatgi are representing the gaming firms. Additional Solicitor General N. Venkatraman is appearing for the Centre and GST authorities, while Kapil Sibal is representing the Tamil Nadu government, which supports stricter regulation of online gaming. Advocate Datar and others are also representing petitioners.
The court’s final ruling will decide the validity of retrospective tax demands and define how online gaming will be taxed in India going forward.
