Gaming companies face Rs 2.5 lakh crore hit as SC upholds GST

NEW DELHI: In a large setback to online gaming firms facing show-cause notices for GST evasion of astir Rs 2.5 lakh crore (with penalty), Supreme Court Wednesday upheld levy of 28% taxation connected the afloat look worth of online gaming bets and validated rules nether CGST for determining valuation of taxable supplies for lotteries, betting, gambling, equine racing and casinos.Justices J B Pardiwala and R Mahadevan said determination was nary law infirmity successful levying GST connected online games and declared it valid.In June past year, tribunal had stayed GST proceedings against 49 gaming firms implicit retrospective request notices to them. It extended the extortion granted to them for different 3 months.In Oct 2023, GST Council had imposed 28% taxation connected afloat look worth of online gaming bets. Gaming industry, however, has been asking for the taxation to beryllium calculated connected gross gaming gross alternatively than look worth of bets. The companies had received show-cause notices alleging GST evasion of Rs 1.12 lakh crore. As GST Act allows for a punishment of up to 100% of taxation demand, the full liability volition adhd up to astir Rs 2.5 lakh crore.