The Supreme Court today transferred to itself the petitions in the High Courts against the imposition of 28 per cent Goods and Services Tax (GST) on online gaming companies.
A bench of Chief Justice of India DY Chandrachud, Justice JB Pardiwala and Justice Manoj Misra directed the transfer of 27 writ petitions pending in eleven High Courts and tagged them with the petition pending in the Supreme Court lodged by GamesKraft. The direction was passed allowing a transfer petition filed by the Centre. The matter will be posted in the last week of April 2024.
Earlier in January, the Centre undertook to file a petition to seek transfer of all cases related to retrospective imposition of GST from several High Courts to the Supreme Court. Senior Advocate Harish Salve, appearing for the online gaming companies and CJI DY Chandrachud asserted that transferring all the cases to the top court will avoid inconsistencies. The Chief Justice had further told the lawyers that he is inclined to allow the petition once it is filed.
Multiple online gaming companies including Dream 11, Games 24×7, and Head Digital Works have lodged writ petitions before the Supreme Court also challenging the GST imposition. In the Gameskraft case, the apex court had stayed the Karnataka High Court’s verdict which had quashed the GST Intimation Notice to the tune of Rs 21,000 crore issued to the gaming company.
During the hearing held in January 2024, Senior Advocate Harish Salve, representing the online gaming companies, mentioned that there is no supply of actionable claim to impose GST on the 100 per cent of the face value of the bet or the amount paid into the totalisator.
On October 1, 2023, the GST council approved 28 per cent GST on all online games. It further noted that between 2017 and October 1, 2023, all online games involving bets, irrespective of skill or chance, needed to pay a GST rate of 28 percent on the full value of the bets placed, as it fell under the category of gambling. Consecutively, the online gaming companies have been issued GST notices valued at Rs 1 lakh crore so far this year.