Key Points
The notices raised a demand of GST on the 'buy in' amount for each game and proceeds on the hypothesis that the staking of money in online games (whether of skill or chance) amounts to betting and gambling and that the 'buy in' constitutes as a transfer of goods as actionable claims, according to petitions challenging the notices...
The pleas were filed by the E-Gaming Federation and two of its members - Head Digital Works and Play Games 24*7 that face GST demand of 6,497.29 crore and 20,929.37 crore, respectively..
On Friday, additional solicitor general N Venkatraman told a bench led by Chief Justice DY Chandrachud that the petitions by the e-gaming companies have not been served on the government and the issue related to taxation on online gaming is a "serious and a sensitive" matter...
Show cause proceedings have been going on for a few months, we are giving all the information, but they (the tax department) should hold their hands for three more weeks" till the SC heard the case.. The show cause notices were issued after the government clarified that online gaming, betting, and gambling will be levied 28% GST on the full face value from October 1..
The government believes that some of these firms leveraged the lack of clarity on taxation of "game of chance" and "game of skill" before October 1 and there was a need to have a uniform 28% GST on the full value of bets placed on online gaming platforms..
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