28.10.2022: Gameskraft challenges the Rs 21,000 crore tax notice by the GST Intelligence

Karnataka-based online gaming platform Gameskraft has challenged the intimation notice of Rs 21,000 crore by the directorate general of Goods and Services Tax (GST) Intelligence. For games which have already been decided as ‘games of skill’ by the courts, the Rs 21,000 crore tax notice on an online gaming company will go nowhere, the High Court of Karnataka, said. As per reports, the GST intelligence has claimed that the platform is used for gambling.

The notice was released on September 8 and attempted to impose a 28 percent GST on the company’s transactions. In its submission before the High Court bench of Justice SR Krishna Kumar, the company has argued that the platform only conducts games of skill. As per the company statement, Rummy has been held to be a ‘game of skill’ by several high courts and the Supreme Court, constituting 96 percent of the games played on its online platform. 

According to the company, Abishek Manu Singhvi, senior counsel, has made the submissions on behalf of the company. Additionally, he highlighted that in an earlier case between the All India Gaming Federation (AIGF) and the State of Karnataka, the game on the platform was held to be a game of skill by the court, and it was observed that the platform has already paid Rs 1,500 crore in taxes.

As per the report, when asked whether the tax officers are competent to decide on the nature of the games played, the deputy solicitor general mentioned that the notice contains detailed reasoning. Senior advocates Mukul Rohtagi and Arvind Datar appeared on behalf of intervenors in the case on Thursday. The federation of online gaming apps has failed an intervenor application, it added. 

On September 23, the High Court granted a stay on the notice issued by the GST Intelligence and the hearing will continue on Friday, the report concluded. 

Source: The Financial Express

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