SC ruling on Games Kraft GST case could decide fate of India’s real-money gaming industry.

The final decision by the Supreme Court regarding the alleged Rs 21,000 crore GST evasion case against Games Kraft, a skill gaming company, holds significant implications for all real-money gaming firms in India. Legal experts believe that an adverse ruling could further jeopardize an industry already grappling with the newly imposed 28 percent GST regime.

In September 2022, Games Kraft was accused by GST officials of promoting online betting without issuing proper invoices, leading to a tax claim of 28 percent on nearly Rs 77,000 crore in betting amounts. The company was also alleged to have submitted fake invoices and encouraged customers to bet without clear refund options.

Games Kraft argued that its games were skill-based and should attract an 18 percent GST rate on the platform fee. However, in July 2023, the GST Council imposed a 28 percent GST rate on the full face value for all gaming, regardless of skill or chance, though it later suggested taxing deposits instead of individual bets.

This decision, supported by amendments to GST laws, has prompted several states to follow suit. The real-money gaming sector accounted for a significant portion of India’s gaming revenues and is expected to continue growing in the coming years.

In summary, the Supreme Court’s ruling on the Games Kraft case will shape the future of GST liabilities for real-money gaming companies in India, impacting an industry that plays a substantial role in the country’s gaming sector revenues.