The Supreme Court refuses to stay the tax returns of DG GST Intelligence and DGGI e-gaming companies and says it will hear the matter on January 8.

The notices raised the GST requirement to the amount of each game purchase and assumed that betting on online games (whether of skill or chance) was equivalent to betting and gambling and that a purchase was a transfer of goods as disputed claims according to the documents opposing the notices.

The claims were made by the e-Gaming Federation and two of its members - Head Digital Works and Play Games 24x7, with a GST claim of Rs 6,497 crore and Rs 20,929 crore, respectively. They argued that the network operator had not filed a claim against the players, so the GST charge was sustainable.

Additional Solicitor General N Venkatraman says a bench headed by Chief Justice DY Chandrachud says the government has not heard the petitions of electronic gambling companies and the taxation of online gaming is a serious and sensitive matter.

The reasons for the spectacle were revealed after the government clarified that online gaming, betting and gambling will be subject to 28 percent of the full GST from October 1. The government believes that some of these companies benefited from the tax clever before October 1 and levied a flat 28 percent GST on the total value of bets placed on online gaming platforms. The government has also amended the GST Act, making it mandatory for foreign online gambling companies to register in India from October 1.

Senior counsel Harish Salve and Counsel Badri Narayanan, appearing for the federation and the companies, says, “The matter has all India significance and show cause notices worth several times the companies’ turnover are being issued. We want limited protection. Show because proceedings have been going on for a few months, we are giving all the information, but they (the tax department) should hold their hands for three more weeks” till the SC hears the case.”