The Supreme Court, on January 8, agreed to hear a plea filed by the E-Gaming Federation challenging the legality of Goods and Services Tax (GST) show cause notices issued against gaming companies. The apex court issued a notice to the Centre, seeking a reply on the matter.
While considering the plea, the apex court decided not to remand the issue to the High Courts, emphasising the need to hear and decide the matter at the highest legal echelon.
However, the court refrained from issuing interim orders that would protect gaming companies from coercive actions under the GST.
The E-Gaming Federation, representing the online gaming industry, raised concerns over the GST show cause notices, arguing that gaming companies face demands several times their annual turnover.
Renowned lawyer Harish Salve, representing the E-Gaming Federation in the Supreme Court, highlighted the financial strain on gaming companies, stating that when players contribute a buy-in of ₹2500, gaming companies receive only about ₹250.
Salve argued that the taxation approach was particularly burdensome, seeking to tax 100% of the face value of the bet. He presented the industry's perspective, asserting that gaming companies were grappling with substantial financial demands.
In response, the Centre clarified its stance, pointing out that, unlike income tax, GST is imposed on the gross consideration.
According to the Centre's representation to the Supreme Court, if a gaming platform provides a game, each player is required to pay ₹100 as an entry fee.
The Centre argued that the supply of service by gaming companies commences after the deposit amount is paid.
(Edited by : Vivek Dubey)
First Published: Jan 8, 2024 1:31 PM IST
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