Online Gaming News: The Karnataka High Court has overturned a Goods and Services Tax (GST) notice issued to online gaming platform Gameskraft, demanding Rs 21,000 crore in tax. The court held that the activities carried on by Gameskraft do not amount to betting or gambling, and are therefore not taxable under GST. Check out the full information about the notice. For future updates on Gaming and Esports, follow InsideSport.IN
The notice was issued by the Directorate General of GST Intelligence (DGGI) in 2022. The DGGI had argued that Gameskraft’s games involved elements of chance, and therefore constituted betting or gambling. However, the court disagreed, finding that the games were primarily skill-based and that the element of chance was minimal.
Online Gaming News: Karnataka High Court Overturns GST Notice to Online Gaming Platform Gameskraft
The court’s decision is a major victory for the online gaming industry in India. It clarifies that online games that are primarily skill-based are not taxable under GST. This is a positive development for the industry, as it will help to boost growth and investment.
The court’s decision is also significant because it sets a precedent for other online gaming companies. Other companies that have been issued with GST notices can now use the court’s decision as a defense. This is likely to lead to a number of GST notices being overturned, which will be a further boost for the online gaming industry. The court’s decision is a welcome development for the online gaming industry in India. It clarifies the tax liability of online games and provides certainty for the industry. This is a positive step for the growth and development of the online gaming industry in India.
Mr. Roland Lander, CEO, All India Gaming Federation on the court judgement
“This landmark decision by the Hon’ble Karnataka High Court which reiterates six decades of jurisprudence will greatly aid gaming start-ups across India to work towards building the industry and ensure its healthy growth. Being the oldest and the largest industry body, the voice of the MSME gaming start-ups, and one of the intervenors in the case, we believe that a progressive and rational GST policy will boost investments within the sector and make this sunrise sector industry a cornerstone for Hon’ble PM’s vision of a 1 trillion-dollar digital economy. We had and continue to have full faith in the government and the judiciary and are hopeful that this progressive decision will pave the way towards clarity and certainty from the GST Council in the GST policy for this sunrise sector.”
Mr. Asish Philip Abraham, Partner, Lakshmikumaran & Sridharan Attorneys
“The judgment reiterates the legal position in relation to skill-based gaming intermediaries and international best practices on taxation. A positive affirmation on GGR method of valuation on actual value addition by the platform service provider. The judgement brings in a sigh of relief to gaming sector facing GST investigation on method of valuation and discounts offered to customers. The verdict is in line with the recognition of gaming platform providers as intermediaries facilitating the transaction by the MeitY under new self regulatory and TDS regime. This will have a positive impact on GST Council to consider valuation for online skill games based on Gross Gaming revenue (GGR), which is internationally accepted. As Hon’ble Finance Minister observed, stability in tax policy will boost investment in the sector.”
The online gaming industry in India is growing rapidly. The industry is expected to reach $1 billion by 2025. The growth of the industry is being driven by a number of factors, including the increasing availability of smartphones and high-speed internet, the growing popularity of esports, and the increasing awareness of the benefits of online gaming.
The Karnataka High Court’s decision is a major boost for the online gaming industry in India. The decision clarifies the tax liability of online games and provides certainty for the industry. This is a positive step for the growth and development of the online gaming industry in India.
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