SC’s GST hearing: ‘Fate of this litigation depends on our skill’

The Supreme Court of India continued hearing arguments in a high-stakes tax litigation involving online gaming platforms. The dispute concerns the applicability of Goods and Services Tax (GST) to online games of skill, a sector facing a potential Rs.2.5 lakh crore tax impact.

A division bench comprising Justices JB Pardiwala and R. Mahadevan heard the matter on Wednesday. Former Solicitor General of India and senior advocate Harish Salve appeared for the E-Gaming Federation (EGF), contesting the current interpretation of GST on online gaming.

During the hearing, Justice Pardiwala remarked, “The fate of this litigation depends on our skill — we can’t take any chance.” The comment highlighted the core issue: whether online games of skill should be taxed like gambling and betting.

Salve argued that the GST regime wrongly classifies skill-based games under rules meant for games of chance. “No one is arguing that games of skill can’t be regulated when there’s money involved,” he stated. “But that’s a far cry from claiming that games of skill suddenly become games of chance just because stakes are introduced.”

The core of Salve’s argument focused on the term “actionable claims.” He stated that entry fees paid for games like rummy or fantasy sports do not meet the legal definition. He referenced the 2006 Supreme Court ruling in Sunrise Associates, explaining that actionable claims involve a guaranteed or transferable benefit.

Source : https://g2g.news/gst-on-online-gaming/scs-gst-hearing-fate-of-this-litigation-depends-on-our-skill/