𝗦𝘂𝗽𝗿𝗲𝗺𝗲 𝗖𝗼𝘂𝗿𝘁 𝗛𝗲𝗮𝗿𝗶𝗻𝗴 𝗼𝗻 𝗚𝗦𝗧 𝗔𝗽𝗽𝗹𝗶𝗰𝗮𝗯𝗶𝗹𝗶𝘁𝘆 𝘁𝗼 𝗢𝗻𝗹𝗶𝗻𝗲 𝗚𝗮𝗺𝗶𝗻𝗴 – 𝗠𝗮𝘆 𝟭𝟯, 𝟮𝟬𝟮𝟱
On May 13, 2025, the Supreme Court of India continued its hearings on the applicability of the 28% Goods and Services Tax (GST) to online gaming platforms. This case, involving companies like Gameskraft, is pivotal in determining the tax treatment of online games, especially those considered games of skill.
𝗞𝗲𝘆 𝗔𝗿𝗴𝘂𝗺𝗲𝗻𝘁𝘀 𝗣𝗿𝗲𝘀𝗲𝗻𝘁𝗲𝗱
𝗗𝗿. 𝗔𝗯𝗵𝗶𝘀𝗵𝗲𝗸 𝗠𝗮𝗻𝘂 𝗦𝗶𝗻𝗴𝗵𝘃𝗶: He emphasized that previous High Court rulings correctly interpreted Supreme Court precedents, distinguishing games of skill from gambling. He cited cases such as Chamarbaugwala, Satyanarayana, and Lakshmanan to support this distinction.
𝗛𝗮𝗿𝗶𝘀𝗵 𝗦𝗮𝗹𝘃𝗲: Representing the E-Gaming Federation and other companies, Salve argued that online gaming platforms merely facilitate gameplay and do not constitute a supply of goods or services. He contended that participation in skill-based games does not result in an “actionable claim” and thus should not be taxed under GST. Salve criticized Rule 31A of the CGST Rules, describing it as a “colourable exercise of legislative power” that unjustly equates skill-based gaming with gambling.
𝗖𝗼𝗻𝘀𝘁𝗶𝘁𝘂𝘁𝗶𝗼𝗻𝗮𝗹 𝗖𝗼𝗻𝗰𝗲𝗿𝗻𝘀
The petitioners argued that taxing skill-based games as gambling contradicts the constitutional framework, especially after the 101st Constitutional Amendment, which removed state authority to tax betting and gambling under Entry 62 of the State List. They contended that the GST Council’s approach violates this amendment.
𝗙𝗶𝗻𝗮𝗻𝗰𝗶𝗮𝗹 𝗜𝗺𝗽𝗹𝗶𝗰𝗮𝘁𝗶𝗼𝗻𝘀
The outcome of this case holds significant implications for India’s online gaming industry, with potential tax liabilities estimated at approximately ₹2.5 lakh crore. The decision could reshape the taxation landscape for digital entertainment platforms in the country.
𝗡𝗲𝘅𝘁 𝗦𝘁𝗲𝗽𝘀
𝗧𝗵𝗲 𝗦𝘂𝗽𝗿𝗲𝗺𝗲 𝗖𝗼𝘂𝗿𝘁 𝗶𝘀 𝘀𝗰𝗵𝗲𝗱𝘂𝗹𝗲𝗱 𝘁𝗼 𝗰𝗼𝗻𝘁𝗶𝗻𝘂𝗲 𝗵𝗲𝗮𝗿𝗶𝗻𝗴𝘀 𝗼𝗻 𝘁𝗵𝗶𝘀 𝗺𝗮𝘁𝘁𝗲𝗿 𝗼𝗻 𝗠𝗮𝘆 𝟭𝟰, 𝟮𝟬𝟮𝟱.
