The Supreme Court today sought Centre’s response and the Directorate General of Goods and Services Tax Intelligence on a plea lodged by the online gaming companies challenging the levy of 28 percent Goods and Services Tax (GST) on all forms of online real-money gaming.
A bench comprising Chief Justice of India DY Chandrachud with Justice JB Pardiwala and Justice Manoj Mishra issued notice after hearing Senior Advocate Harish Salve representing the gaming companies. Reportedly, the petitioners include Dream 11, Games 24×7, and Head Digital Works.
The top court has directed both the Centre and GST department to respond to the plea in two weeks. Reports said that the case is likely to be heard in a couple of months.
Earlier in December 2022, the apex court refused to grant interim relief against GST demand notices to Games24X7 and Head Digital Works. Nonetheless, the court indicated that it will consider a case on constitutional validity of Centre’s decision to impose 28% GST on online gaming companies.
In July last year, the Goods and Services Tax (GST) Council had recommended that online gaming along with casinos and horse racing be taxed at a uniform rate. The council further decided that there should be no distinction between games of skill and games of chance.
The central government last year had proposed the introduction of online gaming regulations in the form of amendments to Information Technology. A few months later, the draft rules were notified.
The draft rules defined a gaming platform as an online gaming intermediary which will have the games registered with a self-regulatory body including a board of directors or the governing body including a board of directors or governing body. Furthermore, the regulatory body was proposed to be registered by the ministry upon an application made by it.