Case Name:
Directorate General of GST Intelligence vs. Gameskraft
Industry involved:
Gaming Industry
Arguements:
Government's stand: Any game (regardless of whether it is skill based or chance based) played with financial stakes involves an "specified actionable claim" and is taxable at 28% on the full value of bet, similar to betting and gambling activities.
Gameskraft's stand: Company argues that online rummy though stakes involved is a game of skill and hence is different from gambling.
The company also claims that it is only a service provider charging a small platform fee/commission and consequently it shall continue to be liable to pay only 18% GST that too on platform fee and not on the entire stake money.
Matter before the Court:
Core issue in Gameskraft GST currently awaiting a Supreme Court ruling is, determining Whether game of skill played for stakes is to be treated and taxed as gambling or not.
Timeline of the case:
September 2022 : Directorate General of GST Intelligence issued show cause notice to Gameskraft, alleging GST evasion of approx ₹21,000 crore.
May 2023: Karnataka HC ruled in favor of Gameskraft, quashing the notice and ruled that game of skill, even when played with stakes do not constitute gambling and are outside the scope of GST on the full face value.
September 2023: GST authorities approached SC and challenged HC decision. SC stayed HC's ruling in September 2023 and consolidated similar petitions and tagged them with the Gameskraft case for consolidated hearing.
Current status:
Supreme Court heard extensive oral arguments over 31 days with final hearing on 12th August 2025. The SC has reserved its judgment. Verdict awaited.