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Summary: Why GST Authorities Want the Supreme Court to Examine the Rs. 21,000 Cr Gameskraft Verdict

GST authorities argued before the Apex court that Karnataka HC’s earlier judgment, observing playing rummy for stakes did not amount to wagering, puts the root of 70 years of Indian jurisprudence “in jeopardy”.

Supreme Court
Credit: Aditi Agrawal

The Karnataka High Court's Gameksraft judgment holding that rummy played for stakes doesn't amount to wagering "goes to the root of 70 years of jurisprudence and places the same in jeopardy", GST Authorities argued in a Supreme Court challenge against the verdict. The GST Authorities’ Supreme Court petition was shared with MediaNama by multiple sources. This story covers the Authorities' concerns with how the Karnataka High Court interpreted ‘gambling’ in its verdict. Stay tuned for more on how Gameskraft allegedly fell afoul of GST law, and more. Delivered in May, the Gameskraft verdict quashed a Rs. 21,000 crore tax evasion order against the gaming major. GST Authorities alleged that Gameskraft—which offers online real money versions of skill games like rummy—was indulging in gambling activities, and should be taxed accordingly. The Karnataka High Court thought otherwise, holding that a game of skill like rummy cannot amount to gambling, irrespective of whether it was played for stakes or not, or online.  The Supreme Court issued notice in the case a few weeks ago. It will be heard after at least two weeks.  The challenge also comes after the GST Council’s recent decision to hike the GST rate for online games played for stakes from 18% to 28%, taxing them at par with gambling. This may complicate the Karnataka High Court’s ruling that games of skill played for stakes are distinct from gambling, and should be taxed differently.  The GST Authorities' main arguments: The GST Authorities case centres around landmark Supreme Court judgements…

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