RMG GST tangle: Justices (Retd) MR Shah & Justice Reddy provide legal opinion in favour of GamesKraft

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Retired Supreme Court Justices MR Shah and Justice R Subhash Reddy have delivered opinions favouring Gameskraft Technologies Private Limited (GTPL), concerning the pending Supreme Court case on recovery of over Rs.21,000 crores from GTPL alone. The notices issued to similar gaming companies on the same grounds aggregate to more than Rs.1,00,000 crores.

The matter will be heard by a bench headed by the Chief Justice of India in the first week of May 2024. It is worth noting that industry body FIFS has also obtained a similar opinion from Justice (Rtd) Ashok Bhushan when Karnataka imposed a ban on online skill gaming in October 2022.

Justice MR Shah in his opinion, has emphasized the distinction between “games of skill” and “games of chance,” highlighting the unique nature of skill-based games like “Rummy.” He states, “A game of chance when played with monetary stakes is gambling but a game of skill whether played with stakes or without is not gambling,” reported Newsportal DNA. G2G has not seen the copy of the opinion.

The assertion by Justice MR Shah underscores the fundamental difference between chance-based and skill-based activities and provides clarity on the GST implications for online gaming platforms. Furthermore, Justice Shah dismisses the applicability of the Skill Lotto case to GTPL’s matter, emphasizing the distinct legal issues at play. According to DNA, the judge stated that “the observations made by the Hon’ble Supreme Court in the case of Skill Lotto will have no relevance or applicability in context of online skill gaming sector in general and to GTPL’s matter currently pending in the Supreme Court in particular.” This stance reaffirms GTPL’s position and sets the stage for an independent examination of the merits of their case.

Similarly, Justice R Subhash Reddy’s opinion echoes Justice Shah’s sentiments, emphasizing the unique nature of GTPL’s case. As per reports, Justice Reddy concluded that, “I am of the considered opinion, that the Skill Lotto’s case decided by the Supreme Court will not cover the issues, which are raised by GTPL and same are to be considered independently.” Justice Reddy highlights the distinction between lotteries and skill-based games, reaffirming GTPL’s contention that their activities do not fall under the purview of “betting and gambling.”

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