The Supreme Court is set to address challenges against the imposition of a 28% Goods and Services Tax (GST) on online gaming companies in July. Several pleas have been filed, contesting the tax rate’s validity and its impact on the online gaming industry.
NEW DELHI: On 3rd May: The Supreme Court will hear a series of petitions challenging the notices issued to online gaming companies, asking them to pay a 28 percent Goods and Services Tax (GST) on the full face value of bets.
READ ALSO: Supreme Court ruling on NCDRC members’ court order violation
The court hearing, scheduled for July 2024, will address the concerns raised by Baazi Networks Private Limited, the owner of Baazi Games, and several other gaming companies.
A bench led by Chief Justice of India (CJI) DY Chandrachud acknowledged the challenge presented by Baazi Networks Private Limited and other gaming companies during the recent plea hearing. The lawyers representing the gaming companies argued that while the government assured the court that it would not take immediate action on the notices, there is a possibility that orders might be passed in certain cases. Additional Solicitor General (ASG) Venkatraman, representing the GST department, urged the lawyers to communicate with him to find a resolution.
READ ALSO: Supreme Court’s Law Clerks’ Moot Court Competition 2024, Promotes Advocacy Skills
The CJI, indicating that the court would address the plea after the summer vacation, requested lawyer Charanya Lakshmikumara, who represents many gaming companies, to send an email in July 2024 to schedule the hearing dates. Currently, a total of 30 petitions by online real money gaming companies challenging retrospective GST notices are pending before the Supreme Court.
These petitions include 27 transferred pleas from various high courts, two original writ petitions filed by Head Digital and Play Games24x7, and an appeal filed by the GST department in response to a Karnataka High Court verdict.
In December 2023, the apex court refused to grant a stay on the notices, but agreed to consider the plea. The online gaming companies have been served with 71 showcause notices, alleging GST evasion of Rs 1.12 lakh crore in the financial year 2022-23 and the initial seven months of 2023-24, excluding interest and penalty.
READ ALSO: Supreme Court Clarifies: “SC Has No Power of Superintendence Over High Courts”
Under section 74 of GST Act, which empowers the department to impose a penalty of up to 100 percent of the tax demand, the total amount could exceed Rs 2.3 lakh crore, including interest. It is important to note that the notices were issued retrospectively, with the GST Council’s interpretation implying that all online games involving bets played between August 2017 and October 1, 2023, regardless of skill or chance, were subject to a 28 percent GST rate on the full value of bets.
FOLLOW US FOR MORE LEGAL UPDATES ON YOUTUBE
