In a major twist, India’s Supreme Court hit the pause button on the Karnataka High Court’s move to nullify a jaw-dropping ₹21,000 crore GST notice against online gaming platform Gameskraft. Why the sudden brake? Well, the top court found some intriguing elements in the High Court’s decision that need a second look and a bit more deliberation.
The backdrop? In 2022, Gameskraft found itself in hot water when a goods and services tax (GST) intelligence unit slapped them with a show-cause notice. The core accusation is a monumental GST default amounting to ₹21,000 crore from 2017 to mid-2022. The magnitude of this claim is unparalleled in indirect taxation history.
But there’s more to the story. Gameskraft, known for game apps like Rummy Culture and Gamezy, faced allegations of fostering online betting and not providing customers with proper invoices.
Now, the GST authorities levied a 28% tax on a betting sum close to ₹77,000 crore which is how it arrived at a figure of approximately ₹21,000 crore. Alleged malpractices, such as presenting fabricated invoices and enticing customers into irreversible bets, added fuel to the fire.
Gameskraft, in response, sought the Karnataka High Court’s intervention against the notice. By May 2023, the High Court not only quashed the notice but also criticized the department’s selective argumentative approach.
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A landmark legal battle: Today’s Supreme Court hearing saw Additional Solicitor General N Venkatraman emphasise the repercussions of the High Court’s judgment, which has inadvertently halted other GST notices. The apex court’s current stance? The GST’s Directorate of Revenue Intelligence has received permission to proceed against Gameskraft, setting the stage for a landmark legal battle.
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