Government seeks Adjournment in SC on retrospective 28% GST on gaming companies

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Additional Solicitor General, representing the Indian government has sought an adjournment in the ongoing Supreme Court case concerning the 28% Goods and Services Tax (GST) impose on gaming companies retrospectively.

This legal battle over GST on online gaming has been ongoing for several years, with multiple judicial interventions shaping its trajectory. In 2022, the GST Council after extensive deliberations, the council recommended a uniform 28% GST on the full face value of bets, triggering strong opposition from industry stakeholders. 

In September 2023, the Supreme Court stayed a Karnataka High Court judgment that had quashed a ₹21,000 crore GST notice against Gameskraft. This case, along with similar tax demands against other gaming companies, led to industry-wide legal challenges. In January 2025, the Supreme Court further stayed show-cause notices totaling ₹1.12 lakh crore, offering temporary relief to the sector. The latest hearing was initially scheduled for March 18, 2025  but the government sought an adjournment due to another taxation matter. The court is now expected to reschedule the hearing, with stakeholders closely watching the proceedings that could define the regulatory and financial future of the online gaming industry. The case, with an estimated financial impact of ₹2.5 lakh crore, is one of the largest tax disputes in India’s history.

The gaming industry has consistently argued that treating skill-based gaming on par with gambling creates an unfair regulatory burden, leading to financial strain on operators and potential job losses. Despite repeated industry appeals, the tax policy was enforced in October 2023, escalating the dispute to higher courts.

According to Storyboard 18, Additional Solicitor General N. Venkatraman, representing the government, requested the adjournment due to another crucial taxation matter in the Supreme Court. Senior counsel Dr. Abhishek Manu Singhvi, representing Gameskraft, requested that the next hearing be scheduled for the end of March or April.

The case was heard by Justices JB Pardiwala and R Mahadevan, who indicated their willingness to hear the matter within the next few days. The gaming industry is contesting the government’s application of Rule 31A of the CGST Rules, which mandates a 28% GST on the face value of each bet. Industry representatives argue that this regulation applies only to gambling and betting, not to skill-based games such as poker, rummy, or fantasy sports.

The imposition of 28% GST has significantly affected the real money gaming (RMG) industry. A ruling in favor of gaming companies would establish a crucial legal precedent, reinforcing the differentiation between games of skill and gambling. The verdict is also expected to shape future regulatory policies, impact investor confidence, and influence the sustainability of the RMG sector.

A senior legal expert, speaking anonymously, stated, “The industry has a very strong case on merits as a plethora of High Court judgments support their claim. There is seven decades of jurisprudence establishing that skill-based games are distinct from gambling and betting. The government is asserting that Rule 31A of the CGST Rules, which imposes 28% taxation on gambling and betting, applies to online skill-based gaming played for stakes between July 2017 and October 2023. It argues that these platforms are supplying actionable claims amounting to gambling and betting.”

The case has far-reaching implications, as gaming companies argue that excessive taxation could cripple the sector. Many industry leaders believe that a favorable ruling would provide much-needed clarity and stability for businesses operating in the space.

As the Supreme Court prepares to deliberate on this landmark case, its ruling could shape the future of India’s online gaming industry and influence regulatory frameworks for years to come.

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