The Supreme Court has stayed the GST show cause notices against online gaming companies.
The bench of Justice J B Pardiwala and Justice R Mahadevan while passing the interim order of stay on show cause notices in the e-gaming retrospective taxation case until the matter is finally settled.
The petitioner, Gameskraft was accused of promoting online betting through games like Rummy Culture, Gamezy and Rummy Time. The authorities claimed the company facilitated betting by allowing players to stake money on card games online and failed to issue invoices to customers.
The GST department imposed a 28% tax on a betting volume of approximately Rs.77,000 crore.
The Online Gaming Firm has challenged the tax department stance to impose a 28% GST retrospective on the full face value prior to the period from 2 October, 2023.
These companies have been contending that the retrospective imposition of a 28% of GST tax rate is equivalent to sounding a death nail to the industry.
The GST Council’s 50th meeting was held in Delhi on July 11, 2023, under the chairmanship of the Union Finance & Corporate Affairs Minister, Smt. Nirmala Sitharaman. The Goods and Services Tax (GST) Council has announced changes in taxation for the online gaming industry. The GST Council has decided that online gaming, casinos, and horse racing will be taxed at 28% at the entry point on the total face value of bets.
The stay not only provides immediate respite to gaming companies from potential coercive action but also safeguards the interests of revenue authorities.
By pausing proceedings, the court ensures that the demands do not become time-barred during the course of litigation, preserving scope for legal clarity without procedural hindrance.
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Case Details
Case Title: Directorate General of Goods and Services Tax Intelligence (HQS) and Ors v. Gameskraft Technologies Pvt Ltd.
Case No.: SLP(C) No. 19366-19369/2023
Date: 10/01/2025
Counsel For Petitioner: Senior Advocates Harish Salve, Dr AM Singhvi, Sajan Poovayya, and Gopal Sankaranarayanan along with Advocate Charanya Lakshmikumaran, partner at Lakshmikumaran and Sridharan
