Supreme Court Provides Temporary Relief to Online Gaming Sector by Staying GST Notices
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New Delhi, Jan 10 (NationPress) The Supreme Court has granted a temporary reprieve to the online gaming industry by staying the Goods and Services Tax (GST) show-cause notices that were directed at various gaming companies, totaling Rs 1.12 lakh crore.
The court has halted all further actions concerning the show-cause notices issued by the Directorate General of GST Intelligence (DGGI) until the case is conclusively resolved, with the final hearing scheduled for March 18.
Following the ruling, shares of gaming firms such as Delta Corp and Nazara Tech surged by as much as 7 percent during intra-day trading on the stock market.
Anuraag Saxena, the CEO of the E-Gaming Federation (EGF), expressed his approval of the Supreme Court's decision.
"This is a win-win situation for both gaming operators facing coercive measures and the government, which may now have extended timelines. We are optimistic about a just and forward-thinking resolution to this matter, which will promote investment, job creation, and enhanced valuations within the gaming sector," Saxena stated.
In 2023, the DGGI issued 71 notices to gaming companies, accusing them of avoiding GST payments amounting to Rs 1.12 lakh crore during the financial years 2022-23 and the initial seven months of 2023-24, not including interest and penalties.
The notices were served under Section 74 of the GST Act, which permits the imposition of penalties up to 100 percent of the tax demand; the total liability could surpass Rs 2.3 lakh crore, factoring in interest.
In August 2023, the GST Council amended regulations to stipulate that all online games involving bets, whether based on skill or chance, would incur a GST rate of 28 percent on the entire value of the bets, rather than on the gross gaming revenue, effective from October 1 of the same year.
