SC begins crucial hearing on GST applicability to online gaming, fantasy sports and casinos
The Supreme Court on Monday began hearing a high-stakes case that could reshape the legal and financial contours of India’s online gaming and digital entertainment industry. At the heart of the matter is a massive Rs.1.12 lakh crore Goods and Services Tax (GST) demand on online gaming platforms, fantasy sports operators, casinos, and racecourses — applicable retrospectively from July 2017.
A bench of Justices JB Pardiwala and R Mahadevan is considering whether games involving real-money stakes—regardless of whether they require skill or not—should be treated as gambling under GST law.
Sources in the Revenue Department said the government remains committed to recovering the dues. There is no change in its stand, and it continues to believe that the tax demand is lawful. When asked about earlier suggestions by former Revenue Secretary Sanjay Malhotra that some relief might be considered, officials maintained that such comments do not alter the legal position or official stance.
The case hinges on a crucial legal question: does a skill-based game like rummy or fantasy sports turn into gambling once players put money at stake?
The Centre, through its legal representatives, has argued that once a financial stake is introduced, the activity becomes “betting and gambling” and is no longer exempt under GST law. It then qualifies as a taxable actionable claim under the Central Goods and Services Tax (CGST) Act, 2017.
