Day 18 Gameskraft GST SC hearing: 28% Tax on face value of bets was not intended for casinos
The Supreme Court on Wednesday continued final hearings in the Gameskraft batch of cases challenging the levy of 28% GST on online gaming, casinos, horse racing, and lotteries. The matter is being heard by a division bench of Justices J.B. Pardiwala and R. Mahadevan. It was revealed that the matter includes a total of 93 cases.
Senior Advocate Tarun Gulati resumed and concluded his submissions on behalf of casino operators. He argued that the so-called “chance to win”, treated as an actionable claim inherently includes an equal “chance to lose”, and therefore cannot carry any determinable value for the purposes of taxation. He asserted that the entire face value of bets cannot be treated as consideration for supply, as no real value is transferred to the casino through the bet itself.
Gulati also referred to the findings of the Group of Ministers (GoM) constituted by the GST Council, which had acknowledged the impracticality of taxing each round of betting. He submitted that the GoM had itself concluded that imposing GST on the full face value of bets placed in every round was neither feasible nor desirable, particularly in the context of casinos.
Following Gulati, Senior Advocate Gopal Sankaranarayanan appeared on behalf of casino petitioners and reiterated that Rule 31A of the CGST Rules was originally meant to apply only to betting and gambling in horse racing and was never intended to cover casinos. He submitted that the subsequent introduction of Rule 31C, with effect from 1 October 2023, created a separate valuation rule for casinos and online gaming. According to him, this confirmed that casinos were not covered by Rule 31A prior to that date.
Sankaranarayanan also characterised Rule 31A as arbitrary and confiscatory in nature, aligning with the arguments advanced by other senior counsels across previous hearings. He submitted a consolidated note summarising the submissions.
The matter is scheduled to continue on 24 July 2025, with further arguments expected from other stakeholders in the Gameskraft batch of cases.
