GST demand of Rs. 21,000 crores challenged by Gameskraft

Oct 31, 2022 | GST FAQ, News | 0 comments

GST demand of Rs. 21,000 crores challenged by Gameskraft

In a recent move, the Karnataka-based online gaming platform Gameskraft has challenged the notice of Rs 21,000 crore by the directorate general of Goods and Services Tax (GST) Intelligence received last month.

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, GST intelligence has claimed that the platform is used for gambling.

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. 

Earlier, Gameskraft was issued an intimation notice from the GST authorities on September 8 raising a demand of ₹21,000 crore, which was challenged before the High Court. Despite the Karnataka High Court’s order staying a notice to the Gameskraft, the GST department has issued a demand notice for Rs. 21,000 Crores. Justice SR Krishna Kumar had on September 23rd stayed this notice, observing that there were several contentious issues in the case. “If the same is not stayed, the petition would be rendered infructuous and as such, I deem it just and appropriate to stay the impugned Intimation pending disposal of this petition”, the single-judge had stated.

However, the online gaming company claims that despite this stay order, the authorities illegally, contemptuously and maliciously issued the show cause notice on the very same day as the High Court’s order. The petitioner argued that the allegations in the GST authorities’ show-cause notice were exactly the same as those in the intimation notice which had already been stayed.  

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