Online gaming firms move SC for review of 28% GST verdict

Online gaming companies have moved the Supreme Court seeking review of its 27 May judgment upholding the constitutional validity of the 28% goods and services tax (GST) levy on online gaming and rejecting challenges to retrospective tax demands worth over Rs.1.5 trillion.

According to information available on the Supreme Court website and reviewed by Mint, the petitions were filed on Tuesday by Play Games24x7, Junglee Games and Sachiko Gaming Pvt. Ltd. The petitions have been filed through law firm Lakshmikumaran & Sridharan, urging the apex court to reconsider its ruling.

A review petition is a limited legal remedy through which the Supreme Court is asked to reconsider its own judgment on grounds such as an apparent error on the face of the record or the discovery of important new evidence.

Unlike an appeal, it cannot be used to re-argue the entire case and is usually decided by the same bench in chambers. If the court finds merit in the plea, it may decide to hear the matter in open court.

The review petitions arise from the Supreme Court's 27 May judgment delivered by a bench of Justices J.B. Pardiwala and R. Mahadevan. The ruling was a major setback for the online gaming industry as it upheld the constitutional validity of the 28% GST levy and validated retrospective tax demands issued by the Directorate General of GST Intelligence (DGGI), estimated at over Rs.1.5 trillion.

The court held that online gaming, fantasy sports and other real-money games involving pooled stakes constitute taxable actionable claims arising from betting and gambling under the GST law. It also ruled that online gaming operators are not merely intermediaries facilitating transactions between users but are suppliers of actionable claims.

Source : https://www.livemint.com/industry/online-gaming-firms-sc-ruling-review-28-gst-11784016545683.html