Online gaming companies indulge in betting and gambling, taxable at 28% GST: Indian Government.
The Directorate General of GST Intelligence (DGGI) on Monday told the Supreme Court that online gaming companies indulge in betting and gambling and the amounts that are staked in the games by the participating players on their platforms are taxable.
Additional solicitor general N Venkataraman, appearing for the department, in his opening arguments told a bench led by Justice JB Pardiwala that the department is not taxing the online/offline gaming but its “speculative outcomes” which amount to betting and gambling. “Speculative outcomes are considered relevant for taxing. Whether rummy is a game of skill or chance has no relevance. These games are nothing but gambling only… online activity is indeed betting and gambling activity.”
He questioned that when playing with stakes is gambling and is not excluded, how is it open for the gaming companies to contend to the contrary?
The ASG said that the online gaming industry has been paying goods and services tax (GST) considering its activity as a service, taxable at 18%, but these activities are characterised as betting and gambling and hence taxable at 28% GST under the CGST Act.