• Notification Date: 07-09-2023
• Notification No: N/A

Supreme Court stays Rs 21,000 crore GST Notice to Gameskraft

The Supreme Court on Wednesday stayed a Karnataka High Court order which quashed the Goods and Service Tax (GST) department’s show notice to online gaming company GamesKrraft Technologies seeking payment of Rs 21,000 crore dues. 

Issuing notice to the company on the plea by the GST Directorate, a three-judge bench presided by Chief Justice of India D Y Chandrachud stayed the May 12, 2023, order of the HC. 

The proceedings before the HC dealt with whether online games under the platform would be considered games of skill which attracts 19 per cent GST or one of chance, in which case 28 per cent GST would apply. According to Gameskraft, most of these games were rummy, which they argued had been previously held to be a game of skill. The GST department had argued that rummy was a game of chance and hence liable to taxation at 28 per cent. 

The HC Single-Judge Bench order which upheld the company’s contention said that rummy being substantially a game of skill and not chance, it would not be considered gambling even if the players are playing for a stake. 

Appearing for the GST Directorate Wednesday, Additional Solicitor General N Venkataraman told the bench also comprising Justices J B Pardiwala and Manoj Misra that the HC order was against what was laid down in one constitution bench ruling and three other judgments of the SC. 

The law officer also conveyed his concerns about what he said is the “condemnation” in the HC order for the Directorate’s action.