The Indian online skill gaming industry has again been thrust into the limelight as the legal battle surrounding Goods and Services Tax (GST) applicability takes center stage. In a landmark development, Justice MR Shah and Justice R Subhash Reddy of the Supreme Court have delivered opinions favoring Gameskraft Technologies Private Limited (GTPL), shedding light on the complex GST landscape and its implications for the burgeoning sector.
Power Corridors got an exclusive copy of the two opinions on the GTPL case, one from Justice MR Shah and another from Justice R Subhash Reddy. The opinions favored the concerned company, Gameskraft, in the ongoing Supreme Court case and deciphered the distinction between the premise of ‘Games of Skill’ and ‘Games of Chance.’
Legal Opinions Favor GTPL in the Ongoing Supreme Court Case
India’s online skill gaming industry has been facing regulatory turbulence in recent years, with GST implications being a focal point of contention. The imposition of a 28% GST rate on online gaming platforms has been met with resistance, threatening to impede the industry’s growth trajectory. Amidst this backdrop, GTPL’s legal battle has emerged as a crucial juncture, with the company challenging the demands of the Directorate General of Goods and Services Tax Intelligence.
Justice MR Shah’s opinion emphasizes the distinction between “games of skill” and “games of chance,” highlighting the unique nature of skill-based games like “Rummy.” He states, “A game of chance when played with monetary stakes is gambling, but a game of skill whether played with stakes or without is not gambling.” This assertion underscores the fundamental difference between chance-based and skill-based activities, clarifying the GST implications for online gaming platforms.
Furthermore, Justice Shah dismisses the applicability of the Skill Lotto case to GTPL’s matter, emphasizing the distinct legal issues at play. He states, “The observations made by the Hon’ble Supreme Court in the case of Skill Lotto will have no relevance or applicability in the context of the online skill gaming sector in general and to GTPL’s matter currently pending in the Supreme Court in particular.” This stance reaffirms GTPL’s position and sets the stage for an independent examination of the merits of their case.
Similarly, Justice R Subhash Reddy’s opinion echoes Justice Shah’s sentiments, emphasizing the unique nature of GTPL’s case. He states, “In view of the above, I am of the considered opinion that the Skill Lotto’s case decided by the Supreme Court will not cover the issues, which are raised by GTPL and the same are to be considered independently.” Justice Reddy highlights the distinction between lotteries and skill-based games, reaffirming GTPL’s contention that their activities do not fall under the purview of “betting and gambling.”
Justice Shah and Justice Reddy’s opinions underscore the need for a nuanced approach to GST taxation in the online skill gaming sector, considering the skill-based nature of certain games. Their support for GTPL’s case provides a glimmer of hope for the industry, signaling a potential shift towards a more conducive regulatory environment.
As the Supreme Court prepares to adjudicate on the GTPL matter, the industry awaits with bated breath, hopeful for a favorable resolution to pave the way for continued growth and innovation in online gaming. With judicial backing from Justices Shah and Reddy, GTPL’s case stands as a beacon of hope for online skill gaming enthusiasts and stakeholders alike, heralding a new era of legality and legitimacy in the ever-evolving landscape of online gaming.
