GST Department Moves Supreme Court Challenging Karnataka High Court's Gameskraft Ruling

The Goods and Services Tax department has filed a special leave petition in the Supreme Court against a Karnataka High Court ruling in the case of Gameskraft Technologies Pvt.

In May this year, the high court quashed a Rs 21,000-crore show cause notice by the GST Department against online gaming platform Gameskraft Technologies.

The point of contention was the appropriate tax rate for the platform's online games, especially rummy. The company maintained that a tax rate of 18% is appropriate for a game of skill. The GST department, however, was of the view that the game should be subject to a 28% tax because, irrespective of the nature of the game, be it a game of skill or chance, the minute it is played with stakes, it amounts to betting or gambling.

The high court was not inclined to accept the department's contention, which led to the quashing of the show cause notice.

Last month, Revenue Secretary Sanjay Malhotra told BQ Prime that the Finance Ministry was in the process of filing a special leave petition to challenge the Karnataka High Court's verdict.

Malhotra's comments came a day after the GST Council, in its 50th meeting, approved a tax rate of 28% of the total value of bets placed on a platform.