Supreme Court Upholds 28% GST Levy On Online Gaming, Classifies It As Betting & Gambling
The Supreme Court upheld a 28% GST on full online gaming stakes, classifying it as gambling.Summary
In a significant ruling for India's online gaming sector, the Supreme Court has upheld the levy of a 28% Goods and Services Tax (GST) on the full amount staked by players, rejecting the industry's argument that the tax should only apply to platform revenues. A bench comprising Justices J B Pardiwala and R Mahadevan declared that online gaming platforms are suppliers of actionable claims and not mere intermediaries, making them liable for GST on the full value of user stakes. The court rejected the distinction between games of skill and gambling, stating that betting and gambling are defined by the presence of stakes on uncertain outcomes, regardless of skill. This decision effectively ends the interim relief previously granted to gaming companies facing retrospective tax demands, potentially exposing the industry to liabilities exceeding Rs 2.5 lakh crore. The court also affirmed the government's power to prohibit online gambling to protect public order.
(Source：Knn India)