00:00 The Supreme Court has announced that it will hear all appeals pertaining to the 28% taxation
00:05 on all online gaming companies. My colleague Varun joins in to tell us more on this.
00:10 Yeah, hi. So these e-gaming companies are challenging the government's stance to
00:19 impose a 28% GST on full face value of the bets placed for the period prior to October 1st, 2023.
00:26 Now a quick background, as per the changes introduced by the government in the GST Act in
00:30 August, online gaming was added to the list of actionable claims along with lottery, betting,
00:36 gambling that attract a rate of 28%. Now this change was supposed to be made applicable from
00:41 1st October 2023. Now arguing for one of the gaming companies today, senior advocate Harish
00:47 Salve said that the tax department is demanding a tax on the entire churn of the money that is
00:52 coming in on the platform or the entire face value of the bets. What this means is that if a player
00:58 starts playing with say a 100 rupees and say the player winds up with 500 rupees after placing
01:03 multiple bets on the platform, in a situation like this the total betting value would come to around
01:08 2500, 3000 or 4000 depending on how many times it has been churned out. Now Salve also asserted
01:15 that there is no supply of an actionable claim by the online operators to the players and hence
01:20 the GST is unsustainable in law itself. However, the tax department represented by ASG and Venkat
01:26 Raman said that these gaming platforms supply services to the players online and that this is
01:32 an actionable claim. The department has also sought to transfer all the similar cases that
01:37 have been pending before various high courts, before the supreme court so that an authoritative
01:41 ruling on this matter can be gotten once and for all. The tax department has also consistently
01:48 been taking a stance that this liability was pre-existing and that the law has not been amended
01:52 but rather clarified in this aspect. Consequently, the tax department has been issuing GST notices
01:58 for the periods prior to October 1st, 2023 as well and this has led to a battery of GST notices being
02:04 slapped on these companies with demands that are running into multiples of their earnings.
02:08 Now it remains to be seen what the court will have to say on this issue since this is something
02:13 that has been plaguing the gaming industry for quite some time now.
