India’s apex court to hear online gaming GST pleas from May 5
The Supreme Court of India has scheduled the hearing of a batch of petitions filed by online gaming companies challenging the 28 percent Goods and Services Tax (GST) on real-money gaming to begin on May 5.
Gaming firms challenge 28% GST
Online gaming companies including Head Digital Works, Games24x7, and Dream11 have filed petitions challenging the union government’s decision to impose GST at 28 percent on the face value of bets placed on online platforms, rather than on the gross gaming revenue (GGR). The companies have also opposed the retrospective application of the tax.
The Supreme Court, in the previous hearing, had issued notices to the union government and GST authorities, directing them to respond to the companies’ submissions. Senior advocate Harish Salve is representing the gaming companies, while Additional Solicitor General Venkatraman is appearing for the GST department and the Union of India.
Union govt defends tax move as clarification
The GST Council, in its 2023 decision, brought online gaming, horse racing, and casinos under a uniform 28 percent GST rate on the face value of entry bets. The change came into effect on October 1, 2023, following amendments to the Central Goods and Services Tax Act and the Integrated Goods and Services Tax Act during the monsoon session.
However, the government maintains that the October 1 amendment was a clarification of existing law and not a fresh imposition. It argued that the tax demand is not retrospective but consistent with previous provisions already in place.
Court refused interim relief to companies
On December 15, 2023, the Supreme Court declined to offer interim protection to the companies against the GST demand notices. The court said it would examine the legal questions surrounding the GST levy on the full value of bets during the final hearing.
The gaming firms insist that the 28 percent GST should apply only from October 1, 2023, and only on the platform’s earnings — the GGR — and not the entire amount staked by users.
Gameskraft case set the tone
A major development in the case was the ₹21,000 crore tax demand issued to Bengaluru-based Gameskraft. The Karnataka High Court had quashed the GST notice in May 2023, calling the levy excessive. However, the Supreme Court stayed the High Court’s order in September 2023, allowing the GST authority’s claim to remain active.
The tax notice against Gameskraft — based on user activity in games like Rummyculture, Gamezy, and Rummytime — was the largest in the history of indirect taxation in India. The GST authorities argued the company was promoting online betting, which falls under taxable gambling activities.
