Final Hearing on GST on Online Money Gaming Soon: Supreme Court Issues Notice in E-Gaming Federation Writ Petition [Read Judgement]

In a significant step, SC is set to hear final arguments on the admission stage of challenge to imposition of 28% GST on Online Gaming by the Union and States.
Final Hearing on GST on Online Money Gaming Soon - Supreme Court Issues Notice in E-Gaming Federation Writ Petition - TAXSCAN

In a significant development, the Supreme Court of India heard the Writ Petition, presented by M/s E-Gaming Federation & Anr. against the Union of India & Ors. and issued notice to the Central Government to address the imposition of 28% GST on online money gaming, horse racings and casinos.

For the Petitioner(s), a formidable legal team was led by Mr. Harish N Salve, Senior Advocate, supported by Mr. Sajan Poovayya, Senior Advocate, and others.

On behalf of the Respondent(s), Mr. N. Venkataraman, Additional Solicitor General, along with Mr. Arijit Prasad, Senior Advocate, and others, represented the Union of India & Ors.

The Supreme Court issued a notice to the Union of India for the case. N Venkataraman, Additional Solicitor General, assured the filing of a counter affidavit within two weeks.

These companies challenged the constitutional validity of imposing a 28% GST. Senior Advocate Harish Salve, representing the gaming companies, argued that the GST was imposed on the entire value of bets, effective from October 1, rather than on the companies’ revenue.

This, according to Salve, amounted to arbitrariness and illegality, leading to demand notices for previous financial years. The case involves questions about whether actionable claims can be considered goods without a constitutional change and whether wagering can give rise to an actionable claim

The case was directed to be tagged with SLP (C) Nos 19366-19369 of 2023 (Director General of Goods and Services Tax Intelligence & Ors v Gameskraft Technologies Private Limited & Ors), the issue addressed by Gameskraft.

Notably, to streamline the proceedings, Ms. Charanya Lakshmikumaran and Mr. Chandrashekhar were designated as nodal counsel. They are tasked with compiling submissions, pleadings, documents, and precedents in electronic form, aligning with the Circular dated August 22, 2023, regulating submissions in larger Bench cases.

The nodal counsel will coordinate with all lawyers appearing in the case and compile and file in the electronic form five volumes duly indexed as set out below:

i. Volume I – Written Submissions of Petitioners/Appellants

ii. Volume II – Written Submissions of the Respondents:

iii. Volume III – Documents:

iv. Volume IV – Statutory enactments and research material:

v. Volume V – Precedents

The case is currently set to be listed before the Supreme Court Division bench of Chief Justice Dhananjaya Yeshwant Chandrachud, Justice J B Pardiwala and Justice Manoj Misra on April 2, 2024.

Read More: GST Levy on Online Gaming: The Story so Far

The focus of attention is now directed towards the Supreme Court, which is scheduled to review the Central Government’s appeal against the Karnataka High Court’s decision to invalidate GamesKraft’s GST notice. It’s worth noting that the Supreme Court has stayed the Karnataka High Court‘s order quashing GST notice worth Rs. 21,000 crore.

Meanwhile, On Friday, Kerala Governor Arif Mohammed Khan granted approval to an ordinance modifying the state Goods and Services Tax (GST) law concerning gambling, according to sources familiar with the situation.

Read More: GST on Online Gaming: Kerala Govt assents to GST Amendment Ordinance

The outcome of the case at the Apex court holds immense importance to the future of Online Gaming Companies such as Dream11, Gameskraft and other industry giants.

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