Quick Summary
Dark clouds loom over the post-probe move against online gaming companies by GST Authorities after a ruling by Karnataka High Court in the Gameskraft matter. The government, in response to a question in Lok Sabha some time back, had given an estimate of tax evasion of around ₹23,000 crore by some gaming companies (including online gaming companies). Central Board of Indirect Taxes and Customs (CBIC) will initiate action against online gaming companies, based on its investigation, after th
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FAQ :
Action is delayed because the Karnataka High Court quashed a significant notice issued to Gameskraft, and GST authorities are awaiting further legal clarity, potentially from a Supreme Court ruling.
The Gameskraft case involved a ₹21,000 crore GST notice, with the dispute centering on whether online rummy is a game of skill or a game of chance.
The industry argues online games are games of skill, attracting an 18% GST. The government considers them games of chance, wanting a 28% GST rate.
The High Court ruled that games like rummy, played online or physically, are games of skill and not gambling, regardless of stakes involved.
There are indications that the government may appeal the High Court ruling to the Supreme Court, which could further impact future actions against gaming companies.
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