Gaming companies face Rs 2.5 lakh crore hit as SC upholds GST

NEW DELHI: In a giant setback to on-line gaming companies dealing with show-cause notices for GST evasion of round Rs 2.5 lakh crore (with penalty), Supreme Court docket Wednesday upheld levy of 28% tax on the total face worth of on-line gaming bets and validated guidelines underneath CGST for figuring out valuation of taxable provides for lotteries, betting, playing, horse racing and casinos.Justices J B Pardiwala and R Mahadevan stated there was no constitutional infirmity in levying GST on on-line video games and declared it legitimate.In June final 12 months, court docket had stayed GST proceedings in opposition to 49 gaming companies over retrospective demand notices to them. It prolonged the safety granted to them for one more three months.In Oct 2023, GST Council had imposed 28% tax on full face worth of on-line gaming bets. Gaming trade, nevertheless, has been asking for the tax to be calculated on gross gaming income relatively than face worth of bets. The companies had obtained show-cause notices alleging GST evasion of Rs 1.12 lakh crore. As GST Act permits for a penalty of as much as 100% of tax demand, the overall legal responsibility will add as much as round Rs 2.5 lakh crore.

28% Levy On Full Face Worth Of Bets Legitimate: Court docket