In what can only be described as a fly-by hearing, the Karnataka High Court quashed a show-cause notice issued by Goods and Service Tax (GST) authorities to gaming platform Gameskraft over alleged tax evasions today. Justice S.R. Krishna delivered the quick order this afternoon. The first show cause notice was issued last September and alleged tax evasions of around Rs. 21,000 crores. The Court stayed the notice a few days later—however, Gameskraft claimed that despite this, the authorities soon issued another tax notice to the company. The allegations in both notices were the same, a petition filed in the Court noted. The authorities had justified the massive figure by arguing that Gameskraft's services fell under "betting and gambling" category and that the full entry fee should be taxed at 28%. Gameskraft currently offers online rummy and some fantasy sports games, and online games' gross gaming revenues are taxed at 18%. Why it matters: Challenging the order in Court, Gameskraft argued that the authorities were failing to distinguish between gambling games (like games of chance) and games of skill. Games of skill require brains over luck to be won, and a couple—including rummy—have even been upheld by India's courts to be distinct from gambling games, which are otherwise regulated by state governments. This could make slapping the 28% gambling GST tax on skill-based games unfair—which is ostensibly why Gameskraft and the skill-based gaming industry associations challenging the order in Court argued that the verdict will have industry-wide impacts. We @AIGFOfficial welcome the Karnataka HC's…
Gone in 60 Seconds: Karnataka HC Quashes GST Show-Cause Notice in Gameskraft Case
Gameskraft argued that the authorities were failing to distinguish between gambling games (like games of chance) and games of skill
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