In a significant move, the Center has filed a transfer petition with the Supreme Court, urging the consolidation of all pending cases across various High Courts challenging GST notices issued to real money gaming companies.
The latest development was revealed during a hearing on March 4, 2024, at the Sikkim High Court concerning a petition filed by Delta Corp, where the Deputy Solicitor General apprised the court of the transfer petition.
According to information available on the Supreme Court’s online portal, there are currently 27 cases awaiting resolution in the High Courts of Bombay, Gujarat, Rajasthan, Karnataka, Uttar Pradesh, Sikkim, West Bengal, Punjab & Haryana, all linked to the ongoing transfer petition.
As previously reported, a three-member Supreme Court bench, headed by the Chief Justice, is tentatively scheduled to hear the existing cases in April 2024. Notable petitioners involved in these cases include Games 24×7, Head Digital Works, and the industry association EGF.
In a prior hearing, the tax department had informed the apex court of its intention to file a petition seeking the transfer of all cases related to the same legal issue currently pending in various high courts. Consequently, it is anticipated that the present transfer petition will be consolidated with the ongoing matters.
This legal saga is poised to address the prolonged tax ambiguity surrounding money gaming, providing clarity on whether these activities are deemed games of skill or chance and determining their categorization under the purview of betting and gambling for taxation purposes. During a January hearing, senior advocate Harish Salve represented the online money gaming companies, while Additional Solicitor General N. Venkatraman appeared on behalf of the GST department and the Union of India. ASG Venkatraman revealed that notices had been served to over 99 companies.
The controversy initially surfaced with the issuance of a GST notice amounting to INR 21,000 crores to GamesKraft, which was subsequently nullified by the Karnataka High Court. Following this, the Supreme Court imposed a stay on the operation of the Karnataka High Court’s directions, leading to the issuance of tax notices to other real money gaming companies and prompting a flurry of writ petitions across various High Courts.
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