The Supreme Court has upheld the order of Bombay High Court that the Dream11 is a Game of Skill and not a Game of Chance, not come under Gambling, will attract 18% GST.
The petitioner Gurdeep Singh Sachar claims himself as a public-spirited advocate sought directions to initiate criminal prosecution against the respondent No.3- a Company named “Dream11 Fantasy Pvt. Ltd.”, firstly for allegedly conducting illegal operations of gambling/betting/wagering in the guise of Online Fantasy Sports Gaming, which as per the petitioner shall attract penal provisions of Public Gambling Act, 1867, and secondly for alleged evasion of Goods & Service Tax (GST) payable by it by violating the provisions of GST Act and the Rule 31A of CGST Rules, 2018.
The division bench of High Court observed that “Since the actionable claim in the Online Fantasy Sport Gaming of the respondent No.3 is amongst such actionable claims as per Schedule III and Section 7(2) of the Act, which is not considered as ‘supply of goods’ or ‘supply of services’, Rule 31A has no application. Moreover, an actionable claim referred to in Rule 31A is limited to only activities or transactions in the form of a chance to win in “lottery” or “betting” or “gambling” or “horse racing in a race club”. Thus, Rule 31A which is restricted only to such four supplies of actionable claim has no application in this case”.
The bench also added that “It can be seen that success in Dream11 fantasy sports depends upon user’s exercise of skill-based on superior knowledge, judgment, and attention, and the result thereof is not dependent on the winning or losing of a particular team in the real world game on any particular day. It is undoubtedly a game of skill and not a game of chance. The attempt to reopen the issues decided by the Punjab and Haryana High Court in respect of the same online gaming activities, which are backed by a judgment of the three judges bench of the Apex Court in K. R. Lakshmanan that too, after the dismissal of SLP by the Apex Court is wholly misconceived”.
Further, the petitioner filed a special leave petition against the judgment rendered by the division bench of the high court.
While dismissing the special leave petition, the bench said that it is open for the union of India to apply for a review insofar as the GST aspect is concerned before the High Court of Bombay. If it is done within a period of four weeks from 13.12.2019, the review petition will be disposed of on merits.
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