NEW DELHI: In a big setback to online gaming firms facing show-cause notices for GST evasion of around Rs 2.5 lakh crore (with penalty), Supreme Court Wednesday upheld levy of 28% tax on the full face value of online gaming bets and validated rules under CGST for determining valuation of taxable supplies for lotteries, betting, gambling, horse racing and casinos.Justices J B Pardiwala and R Mahadevan said there was no constitutional infirmity in levying GST on online games and declared it valid.In June last year, court had stayed GST proceedings against 49 gaming firms over retrospective demand notices to them. It extended the protection granted to them for another three months.In Oct 2023, GST Council had imposed 28% tax on full face value of online gaming bets. Gaming industry, however, has been asking for the tax to be calculated on gross gaming revenue rather than face value of bets. The companies had received show-cause notices alleging GST evasion of Rs 1.12 lakh crore. As GST Act allows for a penalty of up to 100% of tax demand, the total liability will add up to around Rs 2.5 lakh crore.
28% Levy On Full Face Value Of Bets Valid: Court
