Gameskraft GST Case Returns to Supreme Court on July 15
The Gameskraft GST case is back in the spotlight. On July 15, 2025, the Supreme Court will hear the matter before Justices J.B. Pardiwala and S.V.N. Bhatti (Mahadevan). This high-stakes hearing will decide the fate of a massive ₹21,000 crore tax demand and clarify the future GST treatment of online gaming, casinos, and betting platforms in India.
Let’s break down the background, legal conflict, and what’s at stake — in plain terms.
What is the Gameskraft GST case all about?
- Company involved: Gameskraft Technologies Pvt. Ltd., a Bengaluru-based online rummy and gaming platform
- GST demand: ₹21,000 crore (raised by DGGI)
- Allegation: The government classified online rummy as “betting/gambling” under Rule 31A of CGST Rules
- Gameskraft’s stance: Skill-based games like rummy are not gambling — should be taxed at 18% on platform fee, not 28% on full stake value
Why is Rule 31A controversial?
Rule 31A(3) of the CGST Rules, 2017, mandates 28% GST on the full face value of bets placed in a betting/gambling setup — applicable to casinos and horse racing.
Gameskraft’s argument:
- Rule 31A cannot apply to online skill-based games
- Rummy has been legally recognised by the Supreme Court as a game of skill (K.R. Lakshmanan v. State of TN, 1996)
- A delegated rule (like Rule 31A) cannot override the parent CGST Act, 2017
Timeline of the Gameskraft GST Case
| Date | Event |
|---|---|
| Mar 2023 | Karnataka High Court quashed ₹21,000 crore demand, calling it illegal |
| May 2023 | Union of India filed SLP before Supreme Court |
| Sep 2023 | Supreme Court stayed HC judgment, reopened investigation |
| Jul 15, 2025 | Final hearing resumes before SC Bench of Pardiwala & Mahadevan |
Why does this case matter for the entire gaming industry?
This case will set precedent for:
- GST treatment of fantasy sports, rummy, poker, e-sports
- Applicability of 28% GST on full contest value vs. platform fee
- Retrospective demands — whether tax can be imposed on past transactions
- Definition of “actionable claims” and its inclusion in taxable supply
If the SC rules in favour of the government, many gaming companies may face bankruptcy-level tax demands. If it rules in favour of Gameskraft, ₹1.5 lakh crore of retrospective demands on the industry may collapse.
Legal Angle: What the Karnataka HC had ruled
- Bench: Chief Justice Prasanna B. Varale and Justice Krishna Dixit
- Held that rummy is a skill-based game, not gambling
- Quashed Rule 31A’s application to Gameskraft
- Stated that Rule 31A is ultra vires when applied to online skill games
- Criticised DGGI for applying casino rules to tech platforms without legal basis
Read the HC judgment here (official website)
Expert View: What professionals are watching for
CA Raghav Chopra, tax advisor for gaming startups, says:
“If SC upholds retrospective 28% tax on full bet value, it could wipe out several startups overnight. This is a make-or-break case for India’s digital gaming future.”
What should gaming companies do?
While the final verdict is pending, companies should:
- Reassess past GST returns and disclosures
- Track proceedings closely for retrospective impact
- Consider legal consultation for protective litigation or advance ruling
- Avoid assuming that platform fee taxation will hold until SC confirms it
Summary
The ₹21,000 crore Gameskraft GST case returns to the Supreme Court on July 15. The verdict will decide if skill-based games like rummy face 28% GST on full bet value or just platform fees — impacting India’s entire gaming industry.
FAQs
Q1. What is Rule 31A in GST?
Rule 31A covers valuation of supplies in casinos and betting. It mandates GST on full bet value, not just commission or fee.
Q2. Is rummy a game of skill under Indian law?
Yes. Multiple SC judgments including K.R. Lakshmanan v. State of TN have held rummy is a game of skill, not gambling.
Q3. Can GST apply retrospectively to gaming?
That’s the key question before the SC. DGGI has issued retrospective demands, but their legal validity is being challenged.
Q4. What happens if SC rules against Gameskraft?
It may open the floodgates for tax recovery from 2017 onward on all online gaming platforms under 28% GST.
Final Take
The Gameskraft GST case is not just about one company. It’s about how India views and taxes its booming digital gaming sector. As the Supreme Court reopens hearings on July 15, Indian startups, tax professionals, and policymakers will be watching closely.