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Informist, Tuesday, Jul. 14, 2026

 

--Online gaming cos file review plea in SC vs retrospective levy of 28% GST

 

NEW DELHI – Online gaming companies such as Junglee Games India Pvt. Ltd., Sachiko Gaming Pvt. Ltd. and others have filed review petitions against the Supreme Court's May 27 verdict that upheld the constitutional validity of the government's law retrospectively imposing goods and services tax at the rate of 28% on these companies on the full value of bets placed and not on the gross gaming revenue. The apex court had held that online gaming activities, including fantasy sports and pool stakes, give rise to actionable claims, constituting taxable supplies within the meaning of the Central Goods and Services Tax Act, 2017.

 

A review petition in India is a formal request to a court to re-examine its own judgment to correct a "patent error". It is not an appeal, but rather a narrow review of a decision by the same bench that delivered the original verdict. Courts are highly reluctant to reopen settled cases and the threshold for success is strict. A review petition is typically only entertained under specific grounds of discovery of new and important evidence that was not within the petitioner's knowledge or could not be produced at the time the decree was passed, mistake or error apparent on the face of the record and any other sufficient reason analogous to the first two grounds.

 

In May, the apex court had rejected petitions by Delta Corp. Ltd., Gameskraft Technologies Pvt. Ltd., and others, challenging the government's retrospective levy on the full value of bets placed. The Supreme Court had vacated its stay on the proceedings related to the show-cause notices issued to online gaming companies by the Directorate General of GST Intelligence, with an estimated amount of INR 1.5 trillion. It had said the correctness of the actual computations, assumptions, notional allocations, and corresponding tax liability shall remain open for reconsideration by the adjudicating authority in accordance with the law and principles laid down in the judgment on the pending show-cause notices, adjudication proceedings, and consequential demands relating to online gaming, fantasy sports, and casino transactions. 

 

The bench of Justice J.B. Pardiwala and Justice R. Mahadevan had ruled that the character of betting and gambling does not depend exclusively upon whether the underlying activity is a game of skill or chance, but upon the existence of stakes based upon uncertain future contingencies. Consequently, even where the underlying activities involve substantial elements of skill, once participation is conditioned upon taking money or money's worth upon uncertain outcomes, the resulting transactions acquire the character of betting and gambling within the framework of the GST legislation, the bench said.

 

Gaming companies argued that the 28% GST on the full face value should apply only from Oct. 1, 2023, after amendments approved by the GST Council came into force. Most of the show-cause notices were issued after the GST Council in 2023 decided to levy a uniform GST of 28% on the full face value of bets placed on all online gaming platforms. The government believes some of these companies leveraged the lack of clarity on taxation of "game of chance" and "game of skill" earlier.  End

 

Reported by Surya Tripathi

Edited by Akul Nishant Akhoury

 

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