The Supreme Court on Friday transferred to itself all the pending petitions in nine High Courts challenging the imposition of 28 per cent Goods and Services Tax (GST) on online gaming companies.
The order of the top court was a partial relief for the gaming companies, which do not have to move all the High Courts to argue their cases.
A three-judge bench of the top court, headed by the Chief Justice of India (CJI) DY Chandrachud, and also comprising Justices JB Pardiwala and Manoj Misra, passed the order transferring all the pending pleas to it.
The apex court passed the decision after hearing the plea filed by the Centre seeking transfer of all 27 petitions pending in nine High Courts across India.
While allowing the plea of the Centre, the top court said it was transferring all the pleas to itself and would hear all the 27 petitions later on. The court, however, did not fix any date to hear the pleas.
Also, many online gaming companies including Gameskraft, Dream 11 and Games 24x7 have moved their respective appeals before the SC challenging the GST imposition.
In the GST council meeting held in July last year, it was decided to tax online gaming at 28% on full face value with no distinction between games of skill and chance. Similarly, casinos and horse racing will also be taxed at 28%. The new tax tax rate came into effect from 1 October 2023.
The online gaming companies opposed the levy of 28 percent GST imposition on them, because earlier they were paying GST at the rate of 18% on gross gaming revenue (GGR) and they have got tax demands as per 28% on each bet placed.
In September, GST field officers issued notices of over Rs 1.12 lakh crore to online gaming companies for alleged tax evasion, prompting legal challenges. Minister of State for Finance Pankaj Chaudhary stated in the Rajya Sabha that 71 show cause notices, amounting to Rs 1,12,332 crore in GST, were issued to online gaming companies during the financial years 2022-23 and 2023-24 (up to October 2023), pending adjudication.