SC Hearing | Gaming companies push back against retrospective 28% GST
India’s top online gaming companies have challenged the retrospective application of a steep goods and services tax (GST) during an ongoing hearing in the Supreme Court, questioning what they describe as a shifting tax stance by the government.
Senior advocate Harish Salve, representing fantasy gaming firms, told the court that the industry is not opposed to a prospective levy of 28% GST on the full face value of entry amounts under the current framework. However, he said the industry is pushing back against the move to apply the tax retrospectively—from before the new rules came into effect.
Until 2022, gaming platforms were charged 18% GST, and that too only on the commission or platform fee they collected. But the Centre later amended the Central GST Act in August 2023 to treat online real money gaming on par with gambling, bringing it under the 28% slab. The new rate has been applicable since 1 October 2023.
Now, companies are being asked to pay the higher tax rate for past years as well—based not just on their commission, but on the full face value of bets placed. Show cause notices totalling over Rs.1.12 lakh crore have been issued to firms across the sector.
Gameskraft, one of the players facing a large tax demand, argued that this amounts to a retrospective change in tax treatment, and violates long-established legal principles. Appearing for Gameskraft, senior advocate Abhishek Manu Singhvi said there’s a clear legal distinction between games of skill and games of chance, one that has stood for over 75 years. He accused the government of confusing “stakes” with “prize money” and said even a Diwali party becomes more exciting when there’s money at play.
