New Delhi: New Delhi: In a major ruling for India’s online gaming industry, the Supreme Court has upheld the imposition of 28 per cent GST on online gaming, fantasy sports, and real-money gaming platforms.
The apex court ruled that when real money is involved in any game, it can be treated similarly to betting or gambling for taxation purposes. The court also clarified that merely calling a game “skill-based” does not exempt it from GST liability.
"The levy of GST of the supply of actionable claims arising from betting and gambling is constitutionally valid and does not transgress Articles 366(12) and 366(12A) of the Constitution," Justice Mahadevan pronounced as reported by Live law.
The verdict comes as a significant setback for gaming companies such as Dream11 and Gameskraft, which had argued that GST should only be levied on the platform fee or commission earned by operators. However, the Supreme Court has now clarified that the 28 per cent GST will apply to the entire entry amount or prize pool.
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The court also set aside earlier rulings that had favoured Gameskraft and accepted appeals filed by the Tamil Nadu and Karnataka governments.
Legal experts say the judgment could have far-reaching implications for the online gaming ecosystem in India, including increased costs for users and operational challenges for gaming companies.
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The ruling may also pave the way for state governments to introduce stricter regulations or even bans on online money gaming platforms in the future.
The decision is expected to significantly impact the rapidly growing online gaming sector, which has seen massive user participation and investments in recent years.
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