Background of the Case
Earlier in the month of March 2018, the Supreme Court had sought the Centre’s response to the petitions filed against the GST notices and later the hearing of those petitions was deferred to July 31. Thus, thirty petitions have been submitted to the APTEL by these companies Regarding the contested demand for more than ₹1. 5 lakh crore. This amount has been arrived at based on the estimated charge of 28 percent GST on the face value of bets.
Meaning of GST Demand
In the Real-money gaming business, seventy-one show-cause notices have been given up to December 2023 relating to GST evasion of ₹1. 12 lakh crore for the financial year 2022-23 and the first seven months of the financial year 2023-24. These figures exclude further interest and penalty. These demands have been arrived at through retrospective calculations and those are deemed unfair by the gaming companies and the GST department.
Supreme Court Proceedings
The Chief Justice of India DY Chandrachud on 18th July gave a hint that the petitions would be taken up on 31st July for further directions only. The cases are believed to be called for hearing on another date. Out of these petitions, thirty, twenty-seven of them have been presented to the Supreme Court as appealed from various high courts. The first petition was registered by Head Digital, Play Games24x7, and Baazi Games, while on the other hand, one of the petitions was filed by the GST department to challenge a verdict of the Karnataka High Court.
Effect on Full-Fledged Gaming Business
For those involved in real money gaming, these GST demands put immense pressure on the industry. Some companies claimed that applying the calculated 28 percent GST on the face value of the bet is disadvantageous when applied retrospectively. This industry has been characterised by great growth and one of the biggest threats it now has to deal with is overwhelming financial risks.
RIGHTS OF CHILDREN AND COMPONENTS of legal arguments and its future implications
The Australian gaming companies’ petitions refute the legal and equitable bills of the GST notices issued retrospectively. Proceeding from this case, the consequences will also affect all real-money gaming sectors and others that are confronted with retrospective taxation. A ruling on the case means more than determining the desirability of retrospective legislation but also the future fortunes of these companies that the Supreme Court will decide on the law on how it will be implemented.
