SC Adjourns Pleas Challenging Retrospective GST Notices To RMG Firms Till July 31

The Supreme Court has adjourned till July 31 pleas challenging retrospective goods and services tax notices to online gaming and casino firms.

During the session, the court ordered the segregation of some anti-profiteering matters that were mistakenly included with the gaming cases, a source told Inc42.

Moreover, the court has also directed the petitioners to jot down notes to get a clarity of arguments, a lawyer present at the hearing said.

The government had submitted a comprehensive counter-affidavit on the gaming issue only recently, on Monday. The petitioners requested additional time to respond, which the court granted, allowing them until July 31, 2024, to file their rejoinders.

Additionally, any petitioner from cases transferred from various High Courts can submit their written statements by the same date. Both sides’ lead counsels were also given until July 31, 2024, to finalise their common compilations.

As of December, real-money gaming companies had received 71 show-cause notices for alleged GST evasion amounting to INR 1.12 Lakh Cr in 2022-23 and the first seven months of 2023-24, excluding interest and penalties.

On Wednesday, gaming major Nazara Technologies subsidiaries, Openplay Technologies Pvt Ltd and Halaplay Technologies Pvt Ltd, received substantial tax notices from the Director General of GST Intelligence, Kolkata.

Openplay Technologies was served a show cause notice under Section 74(1) of the CGST Act, 2017, and the State SGST Act, 2017, with a proposed liability amounting to INR 845.72 Cr for the period from 2017-18 to 2022-23, Nazara said in an exchange filing.

Last year, the GST Council decided to impose a 28% GST on online real-money gaming on the full face value of the bets. Several online gaming startups, including Gameskraft, Delta Corp and others received notices to pay INR 1.12 Lakh Cr GST, following which many have moved courts challenging the tax notices.

More than 50% of online gaming companies in India witnessed stagnant or declining revenues after the government imposed 28% GST, a recent report released jointly by EY and US-India Strategic Partnership Forum (USISPF) said, based on the latter’s survey of 12 such companies.