Online Rummy Declared Game of Skill: GST Implications Stayed Pending Final Hearing
Summary in Key Points:
- Games of Skill vs. Chance: The High Court has held that online/offline rummy games, played with or without stakes, are primarily games of skill and not chance.
- GST Implications: As games of skill, they fall outside the scope of “betting and gambling” under Entry 6 of Schedule III to the CGST Act, 2017, and are therefore not taxable as such.
- Key Distinction: The court differentiated between games of skill, games of chance, and mixed games, emphasizing that only games predominantly reliant on chance constitute gambling for tax purposes.
- ‘Business’ Definition: While the definition of ‘business’ under the CGST Act includes ‘wagering contracts,’ it doesn’t equate games of skill with lottery, betting, and gambling.
- Show Cause Notices Stayed: Proceedings on show cause notices issued to online rummy platforms have been stayed pending the final hearing of the matter.
Decision:
The Supreme Court acknowledged the High Court’s ruling and has effectively stayed further proceedings on the taxability of online rummy under GST. The matter has been posted for final hearing, where a definitive decision on the GST implications for online rummy platforms will be made.
SUPREME COURT OF INDIA
Directorate General of Goods and Services Tax Intelligence (HQS)
v.
Gameskraft Technologies (P.) Ltd.
J.B. PARDIWALA and R. Mahadevan, JJ.
SLP (C) Nos. 19366-19369 of 2023 & Others
JANUARY 10, 2025
CASE REVIEW
Gameskraft Technologies (P.) Ltd. v. Directorate General of Goods Services Tax Intelligence (Karnataka), Matter posted for hearing.
Gopal Sankaranarayanan, Sr. Adv., Suhaan Mukerji, Adarsh Kumar, Sayandeep Pahari, Tanmay Sinha, Sudipta Bhattacharjee, Abhishek Manchanda, Shourya Dasgupta, Ms. Trisha Chandran, Ms. Tanya Srivastava, Onkar, Arjyadeep Roy, Ms. Jhanvi Dubey, Advs., Mukesh Kumar Maroria, Ms. Rohini Musa, AORs, Abhishek A Rastogi, Ajay Singh, Advs., Shubham Singh, AOR, Ms. Meenal Songire, Lalitendra Gulani, Ms. Sneha Ghosh, Ms. M. Sarada, Advs., Rajeev Gulani, Ms. Amrita Kumari, AORs, Nirmal Devnani, Adv., Arvind Datar, Sr. Adv., Mahesh Agarwal, Vipin Jain, Ms. Sayaree Basu Mallik, Abhinabh Garg, Advs., E.C. Agrawala, Shashank Tripathi, AORs, Anand Kumar V., Aditya Kishor Tyagi, Advs., Harish N. Salve, Sajan Poovayya, Sr. Advs., V. Lakshmikumaran, L. Badri Narayanan, Advs., Ms. Charanya Lakshmikumaran, AOR, Ms. Neha Choudhary, Ms. Chetna Nayantara Rai, Ms. Umang Motiyani, Ayush Agarwal, Mrs. Sanjanthi Sajan Poovayya, Ms. Falguni Gupta, Ms. Sanjanthi Sajan Poovayya, Ms. Raksha Agarwal, Advs., Balbir Singh, Abhishek Malhotra, Sr. Advs., Karan Sachdev, Ms. Nishtha Chaturvedi, Ms. Shivali Shah, Ms. Shruti Mandora, Advs., Shyam Gopal, AOR, Mihir Joshi, Tushar Hemani, Sr. Advs., Ms. Vaibhavi Parikh, Sandeep Singhi, Shamik Bhatt, Advs., Ms. Anushree Prashit Kapadia, AOR, Karan Talwar, Prahlad Gadipelli, Sandeep Sripada, Advs., Siddhant Buxy, Shaurya Sahay, AORs., Pranay S. Chitale, Ms. Smiti Verma, Ms. Beleena Biju, Advs., Anand Varma, AOR, Ms. Apoorva Pandey, Ms. Adyasha Nanda, Advs., M/S. Dharmaprabhas Law Associates, AOR, Awanish Kumar, Sarthak Nema, Vierat K. Anand, Kumar Shashank, Harish Nadda, Vikalp Singh, Advs., Ms. Srishty Kaul, AOR, Vikram Nankani, Sr. Adv., Prithwiraj Choudhuri, Rajendra Barot, Suresh Varanasi, Dhirajkumar Totala, Sagnik Chatterjee, Ms. Harsha Uppal, Ms. Gunjan Pandey, Ajay Raj, Rohan Satija, Advs., Ms. Sonali Jain, AOR, Jay Sayta, Akshat Gupta, Advs., Ms. Yoothica Pallavi, AOR, Jay Satya, Advs. Rajat Mittal, AOR, Kumar Sambhav, Suprateek Neogi, Advs., N. Venkataraman, A.S.G., Gurmeet Singh Makker, AOR, Rupesh Kumar, Annirudh Sharma-ii, Udai Khanna, V.C. Bharathi, Chitvan Sinhal, Advs. for the Petitioner. Dhruv Mehta, Sr. Advs., Ms. Pritha Srikumar Iyer, AOR, Pradeep Nayak, Ms. Anupama Hebbar, Sankeerth Vittal, Karan Gupta, Abhyudaya Shishodia, Advs., M/S. Plr Chambers And Co., AOR, Dr. Abhishek Manu Singhvi, Sr. Adv., L. Nidhiram Sharma, Advs., Bhakti Vardhan Singh, AORs, Neeraj Kumar Srivastava, Adv., Sahil Bhalaik, AORs, Tushar Giri, Siddharth Anil Khanna, Ritik Arora, Shivam Mishra, Gowtham Polanki, Ms. Gulshan Jahan, Advs., Ms. Madhumita Bhattacharjee, AOR, Nikhil Goel, Raj Singh Rana, A.A.Gs., Akshay Amritanshu, AOR, Ms. Drishti Saraf, Ms. Pragya Upadhyay, Ms. Siddhi Gupta, Naveen Goel, Ninad Laud, Zubin Dash, Ms. Ishani Shekhar, Advs., Dcosta Ivo Manuel Simon, AOR, Prastut Mahesh Dalvi, AOR, Aadarsh Kumar, Adv. for the Respondent.
ORDER
1. These batch of writ petitions those matters that stood transferred to this Court from different High Courts and few matters which were directly filed before this Court. The main matter is SLP (C) Nos.19366-19369/2023 titled “Directorate General of Goods and Services Tax Intelligence (HQS) & Ors. v. Gameskraft Technologies Pvt. Ltd. & Ors.“
2. All these matters have been tagged with the main matter referred to above. Upon request made by the learned counsel appearing for the parties, all these matters were ordered to be notified today, so that an appropriate order can be passed protecting the interest of both the sides.
3. The main matter is now ripe for final hearing. However, according to the revenue, some of the show cause notices are likely to get time barred by the first week of February, 2025.
4. In such circumstances, the further proceedings of all the impugned show cause notices shall remain stayed till the final disposal of the main matter along with all the matters which are tagged.
5. Post these matters along with W.P. (C) No.858 of 2024 for final disposal on 18.3.2025.