GST on Online Gaming: Where the Supreme Court Stands
Let’s break down what’s happening, what’s at stake, and what it means for taxpayers and businesses alike.
Background: Why This Case Matters
- This move sparked legal challenges by major platforms like Dream11, Gameskraft, and casino operators.
What the Supreme Court is Examining
- Is online gaming a betting activity under Entry 6 of Schedule III of the CGST Act?
- Does Rule 31A of CGST Rules apply to skill-based platforms?
Key Legal References
| Provision | Description |
|---|---|
| Rule 31A | GST on actionable claims like lottery, betting, gambling on total bet value |
| Section 7 CGST Act | Defines supply – whether “game play” qualifies |
| Article 246A of Constitution | Dual GST powers to Centre & State – now being debated for scope |
| Gameskraft Ruling (Karnataka HC, 2023) | Ruled in favour of platform – said games were of skill |
| CBIC Circulars (2023–24) | Enforced 28% GST on gross gaming revenue, triggered litigation |
Expert View: The Tax Clarity Problem
Quote from leading GST advisor:
“Until the SC ruling comes, platforms face a compliance dilemma—charge higher tax and lose users, or stay low and risk notices.”
Impact on Different Stakeholders
- Higher GST = Lower returns, fewer incentives
For Government:
- Potential ₹1.12 lakh crore revenue from retro GST claims (as per official estimates)
- Push to regulate online gaming under a uniform framework
Step-by-Step: What Happens Next?
- Hearings expected to continue over several sessions
- Final verdict could overrule High Court judgments
- Based on SC verdict, CBIC may issue new GST clarifications
- Platforms may appeal for relief or refund depending on ruling
FAQs on GST and Online Gaming
Q1. What’s the current GST rate on online gaming?
As per Notification No. 39/2023-CT dated 18.07.2023, 28% on face value.
Q2. Can platforms claim ITC?
No input tax credit is allowed for GST paid under Rule 31A.
Final Thoughts: Watch This Space
This case isn’t just about taxation—it will define the legal identity of India’s booming gaming economy.
GST on online gaming is under Supreme Court review. With 28% tax on total bet value challenged, this verdict will reshape how fantasy sports and casinos are taxed in India.