SC Upholds Centre's Retrospective 28% GST Levy On Online Gaming Companies
India's apex court also upheld show cause notices issued to online gaming companies and directed GST authorities to process the notices in accordance with the law.
The Supreme Court on Wednesday, May 27, upheld the levy of goods and services tax (GST) on online gaming activities, while noting that taxation on online gaming companies is constitutional validity
India's apex court also upheld show cause notices issued to online gaming companies and directed GST authorities to process the notices in accordance with the law.
Further, it clarified that companies would remain free to respond to the notices during adjudication proceedings.
The ruling stems from amendments introduced to the CGST Act in August 2023, which grouped online gaming with betting and gambling for taxation purposes. Before the amendment, games of skill were treated differently from gambling activities. The revised framework imposed a 28% GST on the full-face value of entry amounts staked in online gaming platforms.
The dispute has significant financial implications for the industry. The Directorate General of GST Intelligence (DGGI) had raised tax demands of about Rs 1.12 lakh crore against 71 online gaming companies. Legal experts estimate the total liability, including penalties and interest, could rise to nearly Rs 2.3 lakh crore.
Major companies facing notices include Gameskraft with a demand of around Rs 21,000 crore, Dream Sports at approximately Rs 28,000 crore and Delta Corp at nearly Rs 30,000 crore. Other companies impacted include Games24x7, RummyCircle, My11Circle, Head Digital Works, WinZO, MPL, PokerBaazi, Junglee Rummy and A23.
The tax notices also cover periods prior to October 2023, triggering industry objections over retrospective taxation.
Published By : Nitin Waghela
Published On: 27 May 2026 at 16:52 IST