- The Supreme Court has settled a long-running GST dispute on online gaming, affecting a sector projected at US$8.6 billion by FY27 and tax demands around ₹2.5 lakh crore.
- The core issue was whether online gaming should be taxed as an “actionable claim” at 28% on full face value, or only on platform fees at 18%, and whether skill-based games are protected from gambling/betting treatment.
- The dispute began with a 2022 GST notice to a Bengaluru rummy operator; the Karnataka High Court quashed the demand, saying games of skill are not gambling or betting, but the department appealed.
- Meanwhile, the GST Council and a Group of Ministers recommended taxing online gaming at 28% on full value without distinguishing between skill and chance.
- In 2023, GST rules were amended to explicitly include online money gaming, betting, casinos, gambling, horse racing, and lottery, making the levy clear and retrospective in effect.
Source: a2ztaxcorp.net
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
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