Supreme Court on Wednesday issued a stay order on the Karnataka High Court’s verdict passed earlier in May, quashing the notice served by the Goods and Services Tax (GST) department claiming of Rs 21,000 crore in dues from Gameskraft, an online gaming company.
The DGGI issued a show-cause notice for the period between August 2017 and June 2022 to Gameskraft for alleged evasion of taxes while also being accused of online betting, highlighting that the company was promoting online betting through card, casual and fantasy games including Rummyculture, Gamezy and Rummytime.
The Supreme Court has also issued notices on the Centre’s plea challenging the quashing of the show cause notice and has directed Gameskraft to respond to the Centre’s plea. The Supreme Court stated that the case would be heard within three weeks and no adverse actions would be taken in the interim. The apex court refused to restrain the Centre from starting recovery proceedings against the online gaming company.
Gameskraft opposed the stay on the Karnataka High court’s order, due to preliminary objections. The online gaming company urged the apex court to prevent the recovery of dues until the matter was resolved. Gameskraft argued that it collected only a small amount from the bets placed by players while questioning the imposition of 28% GST on a minimal income of Rs 10 from a deposition of Rs 100 by players.
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