Supreme Court Upholds Retrospective 28% GST Levy On Real Money Gaming Companies
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The Supreme Court (SC) has reportedly upheld the Central government’s decision to impose a 28% retrospective goods and services tax (GST) on real-money online gaming companies over the full face value of bets placed through their platforms.
As per a report by the Bar and Bench, the apex court observed that GST on online gaming activity is constitutionally valid and does not violate constitutional scheme governing GST.
“Online gaming activities, including fantasy sports and other games played on digital platforms, involving staking upon uncertain outcomes, constitute betting and gambling for the purpose of GST framework,” the bench, comprising Justices J B Pardiwala and R Mahadevan, said.
The SC ruled that online gaming platforms are not mere intermediaries, but suppliers of actionable claims amenable to GST.
The case arose after RMG companies challenged GST notices on grounds of differing interpretations on their tax burden. In October 2023, the GST Council had stated that the entire 28% GST would be levied on the full value of bets placed on gaming platforms. Authorities sought to collect retrospective tax notices, taking the stance that this merely clarified the existing provisions.
Industry players decried this interpretation as disproportionate and harmful to their commercial viability. Instead, they argued that GST should only be levied on gross gaming revenue (the platform’s take after deducting winnings), and that the “new” interpretation could not be applied for the previous period.
The saga took another turn in 2025 when the government passed the Promotion and Regulation of Online Gaming Act, which effectively banned RMG. The MeitY notified the regulatory framework for the Act earlier this year and operationalised the rules from May 1.
The swift government action in the sector has resulted in major job losses, shutdowns and aggressive pivots, impacting companies like Dream11, Mobile Premier League, Games 24×7, and Winzo. The ongoing legal cases were brought by industry players including Gameskraft, Delta Corp and Head Digital Works.
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