Modi Government 3.0 presented the first full Budget on July 23, 2024. As a first full budget of the new coalition government, reforms were expected on several policy, tax and regulatory front. Keepi...
Online gaming has garnered a lot of media attention in the recent past, owing to high-pegged demands of approximately INR 1.12 Lakh Crores that has been raised under 71 show cause notices issued by the Tax Authorities, under the Goods and Services Tax Laws (“GST Laws”), for the period July 2017 - September, 2023. The said demands have been raised in the backdrop of two major events namely, the GST Council’s recommendation and subsequent amendment to the GST Laws to levy GST, at the rate of 28%, on the deposit amount paid by the users in online games and the order by the Supreme Court staying the operation of the judgment passed by the Karnataka High Court in the case of Gameskraft Technologies Private Limited. The main allegation of the tax authorities is that online gaming operators are engaged in providing betting activities, and therefore required to pay taxes at the rate of 28%, on the face value of contest entry amounts paid over such platforms.
INDUSLAW's Shashi Mathews and Abhishek Boob analyse the controversy between the online gaming operators and the Tax Authorities, and the legal issues which are likely to be debated before the Supreme Court on the subject matter.
