SC stays K'taka HC decision quashing Rs 21,000 cr GST notice to online gaming platform

The Supreme Court on Wednesday stayed the judgment rendered by the Karnataka High Court which had quashed the show cause notice issued by the GST department demanding approximately Rs 21,000 crore from the online platform 'Gameskraft' holding that rummy is a 'game of skill'.

A bench led by Chief Justice of India D.Y. Chandrachud and Justices comprising Justices J.B. Pardiwala and Manoj Misra issued the notice on the special leave petition filed by the Directorate General of Goods and Services Tax Intelligence and listed the matter for hearing after three weeks.

"We do not want High Courts across India to rely on this judgment (of the Karnataka High Court)," remarked the top court, while staying the impugned judgment of the Karnataka High Court passed in May 11 this year.

Online gaming and GST

Earlier, in July this year, the GST Council levied a 28% rate to casinos, horse racing, etc. on the amount the gaming company earns from its users. It also recommended removing the critical distinction between 'game of skill' and 'game of chance'.

“The Government is saying that if it is a game of chance, it will come under the category of betting, gambling, so there will be a GST of 28% on the gross value. The industry is saying that it is a game of skill and should be liable to 18% GST, not on the gross value, but only on the commission component,” Pratik Jain, Partner, PwC India, had explained to Business Insider.

Thus, the industry has been asking for a GST rollback as it claims that the 28% levied has made operations unfeasible.