Supreme Court upholds retrospective levy of 28% GST on online gaming companies
New Delhi, May 27
The Supreme Court on Wednesday upheld the retrospective 28 per cent Goods and Services Tax levy on online gaming companies as constitutionally valid.
A bench of Justices JB Pardiwala and R Mahadevan said online gaming platforms are not mere intermediaries but are to be treated as suppliers amenable to the GST regime on levies and taxes.
The bench held that organised online gaming activities, including fantasy games involving pooled stakes and contingent price structures, give rise to actionable claims and supplies exigible to GST under the statutory framework governing betting and gambling transactions.
It said that even skill-based games acquire the character of betting and gambling for GST once money is staked on uncertain outcomes.
The online game operators are not mere intermediaries facilitating transactions inter-se between participants, but themselves constitute suppliers of such actionable claims, held the apex court.
Online gaming companies had challenged the retrospective imposition of 28 per cent GST by the government.
In 2023, Parliament amended the Central GST Act to introduce specific definitions relating to online money gaming and provided for a 28 per cent GST on the full face value of bets or deposits made by users, rather than only the platform's commission.
— ANI
Reader Comments
I understand the need for taxation, but retrospective application bothers me from a fairness perspective. If companies followed the law at the time, shouldn't that be respected? It creates uncertainty for business investments.
This is a huge setback for the gaming industry! So many startups and jobs are at risk now. The government should focus on regulating the sector properly instead of squeezing every rupee with retrospective taxes. 😔
Good judgment. These games are nothing but disguised gambling. People lose their hard-earned money thinking they can win big. At least now the government gets a cut and can use it for welfare. Better regulation needed too!
The court's reasoning makes sense - once money is staked, skill games become akin to betting. But applying 28% on the full face value of deposits is extreme. It's like taxing the entire pot instead of the platform's service fee. Hope the government revisits this.
I've seen friends get addicted to these fantasy sports apps, losing lakhs. If this tax discourages such platforms or makes them more accountable, it's a win for society. But I worry about the impact on genuine gaming startups.
Honestly, I'm tired of these companies advertising 'earn from home
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