GST on Online Gaming: Gameskraft Case Update & Legal Impact
The debate on GST on online gaming is reaching a decisive phase. The Supreme Court has listed the next hearing in the Gameskraft case on Monday, July 21, 2025. The outcome could reshape tax policy for online gaming, casinos, and fantasy sports platforms. Let’s break down what’s at stake.
What is the Gameskraft GST case about?
In 2022, the Directorate General of GST Intelligence (DGGI) raised a demand of over ₹21,000 crore against Gameskraft Technologies Pvt Ltd. The allegation? That the company offered betting and gambling disguised as “games of skill,” and thus, GST should be charged at 28% on full face value under Rule 31A of CGST Rules.
Legal Timeline at a Glance
| Date | Development |
|---|---|
| Sep 2022 | Karnataka HC quashes ₹21,000+ crore GST demand |
| Oct 2023 | SC stays HC order and admits appeal (Union of India vs Gameskraft) |
| July 21, 2025 | Next SC hearing scheduled |
Why is the July 21 hearing crucial?
- Centre’s Stand: As per Finance Act, 2023 amendments (effective 01.10.2023), 28% GST is applicable on online gaming, casinos, and horse racing, regardless of whether it’s a game of skill or chance.
- Retrospective Angle: The SC must decide if such tax can be levied retrospectively using Rule 31A, even before the 2023 amendment came into force.
- Industry Impact: Over ₹1.2 lakh crore in tax notices have already been sent to platforms. The verdict will affect startups, investors, and users alike.
Key Legal Issues Being Debated
- Validity of Rule 31A(3): Can this rule, meant for betting and gambling, apply to online skill-based games?
- Constitutional Rights: Does taxing skill games as betting infringe Article 19(1)(g) – the right to practise any profession?
Focus Keyphrase Subheading:
GST on Online Gaming – Current Position (Post 01.10.2023)
Following the 50th GST Council meeting, the law now mandates:
- 28% GST on full face value (not just platform fee)
- Applies uniformly to all online games, whether skill or chance
- Backed by amendments to CGST Act, 2017 and IGST Act
Notification References:
- Notification No. 28/2023 – Central Tax, dated 29.09.2023
- Notification No. 29/2023 – Central Tax, dated 29.09.2023
Expert Insight:
“Applying Rule 31A retrospectively creates serious legal overreach. If the Supreme Court upholds retrospective tax, every gaming platform may face bankruptcy-level liability.”
— GST Litigation Advisor, Bengaluru
Practical Tip for Gaming Companies
- Post-October 2023: Ensure strict compliance with 28% GST on face value
- Pre-October 2023: Keep documentation ready to defend treatment of games as ‘skill-based’
- Invest in legal audit: Classify games, tax positions, and past returns
Possible Outcomes on July 21
| Outcome | Impact |
|---|---|
| SC strikes down retrospective tax | Big relief for startups, large refunds possible |
| SC upholds retrospective demand | Massive tax liability on dozens of platforms |
| SC seeks re-hearing or adjournment | Uncertainty continues |
FAQ: GST on Online Gaming
Q1: Is GST applicable on winnings or platform fee?
From 01.10.2023, GST is charged on total deposit amount (face value), not just platform margin.
Q2: Can users claim input tax credit (ITC)?
No, since these are non-business supplies for end-users.
Q3: What if a game is 100% skill-based?
Post-amendment, distinction between skill/chance is irrelevant for GST.
Summary (Google Snippet Style)
GST on online gaming is under Supreme Court scrutiny in the Gameskraft case. The July 21 hearing could determine whether retrospective tax applies to online skill games, with huge implications for gaming firms and tax law.
Final Thoughts & CTA
The outcome of the Gameskraft GST case could redefine the Indian online gaming ecosystem. Whether you run a platform or are an investor, legal clarity is critical. For GST audits, compliance support, or filing strategy: