The Supreme Court has adjourned to July 31 the thirty petitions filed by actual-money gaming platforms, challenging retrospective GST notices amounting to 1.5 lakh crore at 28% face value of bets.
On Monday, the government submitted a counter-affidavit against which, the petitioners pleaded for additional time to respond which was granted eventually with the adjournment. CJI DY Chandrachud hinted on July 18 that the cases would only be getting listed with both sides’ written statements on July 31 and successive dates will be scheduled for further proceedings.
Head Digital, Play Games24x7, and Baazi Games had filed the original petition. 27 of the total 30 petitions were transferred from high courts to the apex court as Karnataka High Court’s verdict was challenged by the GST department.
Till December last year, the real-money gaming platforms had received 71 show-cause notices for alleged evasion of GST worth Rs 1.12 lakh crore in FY23 in addition to the initial seven months of FY23, with the exception of interest and penalty.
Prominent gaming company Nazara Technologies stated on July 18 that its subsidiaries- Openplay Technologies and Halaplay Technologies received payment demands worth Rs 1,120 crore. While the gaming platforms used to pay 18% GST as Gross Gaming Revenue on platform fees, the GST council levied 28% GST in August 2023 on the full face value of player deposits considering it gambling irrespective of skill or chance. The council declared that all online gaming sites involving bets and played between August 2017 and October 1 2023 will need to pay the levied portion.
Hence, retrospective tax notices were sent to skill-based platforms as well, such as Gameskraft, Games 24×7, Head Digital Works (A23), Dream Sports, and Deltatech Gaming, though courts have often stated that the skill-based gaming platforms cannot be taxed similarly to chance-based gaming sites. On June 22, the GST Council recommended an amendment to the CGST Act 2017, encouraging the government to overrule the retrospective demands.
