Supreme Court Centralizes Legal Battle Over Online Gaming Taxation

New Delhi: The Supreme Court has taken a decisive step in the ongoing dispute over the Goods and Services Tax (GST) imposition on online gaming companies, consolidating all cases from various High Courts under its jurisdiction. This move comes as the apex court responds to the Central government’s plea to centralize the legal challenges against the levy of a 28 percent GST on online gaming entities.

A bench comprising Chief Justice D.Y. Chandrachud, Justice J.B. Pardiwala, and Justice Manoj Misra has directed the transfer of all 27 petitions pending in nine High Courts across the nation to itself. Among the litigants are prominent online gaming firms like Gameskraft, Dream 11, Games 24×7, and Head Digital Works, who have contested the imposition of the 28 percent GST.

Earlier interventions by the Supreme Court included the stay on a Karnataka High Court verdict that nullified a GST intimation notice amounting to Rs 21,000 crore issued to Gameskraft, an online gaming company.

On January 8, the apex court had issued notices to the Central government following pleas by the E-gaming Federation and others, challenging the 28 percent GST levy.

The genesis of the dispute traces back to a GST council meeting in July 2023, where it was resolved that online gaming, alongside casinos and horse racing, should bear a uniform tax rate. Importantly, the council opted against making a distinction between ‘games of skill’ and ‘games of chance’ for taxation purposes.