In a move to streamline the adjudication process, the Indian government is contemplating a request to the Supreme Court to consolidate all Goods and Services Tax (GST) online gaming cases currently in litigation. A senior official from the Finance Ministry explained that the request is grounded in the need for a unified interpretation of the taxability issue surrounding online gaming.

Clubbing Cases for Clarity: If accepted by the Supreme Court, the order would consolidate all pending cases, preventing multiple interpretations of the same tax law. This would simplify the decision-making process, bringing coherence to the legal landscape surrounding GST on online gaming.

Efficiency and Resource Saving: The potential consolidation aligns with the government’s aim to save resources and time for the Central Board of Indirect Taxes and Customs (CBIC). Combining cases into a single litigation would facilitate a comprehensive resolution and avoid redundant legal procedures.

Gameskraft Case and GST Council’s Decision: The move coincides with the imminent Supreme Court hearing on the Gameskraft case, where the gaming company contests a notice demanding Rs 21,000 crore in GST arrears. The GST Council had earlier approved a 28 percent GST rate on all online games effective from October 1, 2023, leading to multiple GST notices totaling Rs one lakh crore issued to online gaming companies this year.

Dispute Over Tax Applicability: The government’s interpretation, asserting the applicability of the 28 percent tax rate before October 1, 2023, has sparked disagreements with online gaming firms. Companies argue that the revised tax rate should only be effective from October 1, 2023.

Ongoing High Court Cases: Various High Courts, including Bombay HC, Goa bench of Bombay HC, and Sikkim HC, are currently hearing cases related to GST notices served to online gaming companies and casinos. The legal battle involves major players like Dream 11, Games 24×7, and Head Digital Works.

Legal Developments: Recent legal actions, such as the Bombay High Court in Goa prohibiting authorities from making definitive decisions without prior court approval, and the Sikkim High Court staying a GST demand notice of Rs 628 crore against Delta Corp, highlight the intensity of the ongoing legal tussle between the government and online gaming entities.*