The Supreme Court continued hearings on the Gameskraft batch of cases for the fifth consecutive day on May 9, 2025. Senior counsel presented arguments on behalf of the All India Gaming Federation (AIGF). He contended that the government introduced substantive amendments to tax online gaming only in 2023.
According to him the 2023 amendments added a “deeming fiction” by including a proviso to the definition of “supplier.” It also identified “online money gaming” as a specified actionable claim. Mehta stated that “provisions to tax online money gaming did not exist before that.”
He also criticized Rule 31A of the CGST Rules, calling its wording vague. He argued it cannot be used to impose taxes on online gaming. He noted that this is an industry-wide concern, as several companies have received show cause notices exceeding their turnover.
Another Senior counsel also made arguments on behalf of Gameskraft CFO Ramesh Prabhu. He discussed Rule 31A and said online platforms are not engaged in any form of “supply.”
He stated that online gaming does not constitute a supply of goods or services under GST laws. He cited the definition of “actionable claim” from the Transfer of Property Act in support of his argument.
He added that “betting and gambling under Entry 62 of List II” are considered activities. These do not qualify as goods or services. Therefore, only if there is a supply of actionable claims like betting, gambling, and lottery, could Gameskraft be taxed.
He emphasized that the 2023 amendments are not clarificatory stating that these changes “have brought online money gaming within the tax net for the first time.”
He also noted that the amendments have not been made retrospective. He stated that Gameskraft is paying GST on 18% of the platform fee it retains.
Another Senior counsel is expected to make arguments on Tuesday on behalf of online gaming and casino companies.
The matter is listed for further arguments on May 13, 2025. The bench has indicated that it will hear the matter daily and endeavour to conclude it before the summer vacation of the apex court begins from 24th May, 2025.
