The Directorate General of Goods and Services Tax Intelligence (DGGI) stated in the Supreme Court that activities involved in online gaming platforms are equivalent to gambling, and the money invested by players on the platform should be subject to a 28% Goods and Services Tax (GST).
Deputy Attorney General N. Venkataraman, representing the government, noted that although some games may be considered games of skill, as long as there is a monetary bet involved and the outcome is uncertain, it should be regarded as gambling and subject to the 28% GST rate.
Previously, online gaming companies had been paying GST at a rate of 18%. However, the government considers these activities to be gambling, and thus applicable for a higher tax rate.
This case involves tax notices issued to 71 online gaming companies and casinos, with a cumulative tax amount of up to 1.12 trillion rupees.
The final verdict of the Supreme Court will have a profound impact on the tax policy of the online gaming industry in India.
