Centre to SC: Games of Skill with Stakes Are Gambling, Must Face 28% GST on Full Entry Amount

The Central Government has formally affirmed to the Supreme Court its position that all online games involving stakes, regardless of skill elements, should attract 28% GST on the full contest entry amount. This stance treats such games at par with gambling activities under GST laws. The clarification comes amid ongoing legal challenges to the GST Council's 2023 decision that significantly increased tax liabilities for the ₹23,000 crore Indian online gaming industry. The government maintains this classification is necessary to prevent revenue leakage, while industry stakeholders argue it unfairly burdens legitimate skill-based platforms. The Supreme Court is examining constitutional aspects of this taxation approach, with final hearings scheduled for July 2025. International practices typically tax only the platform fee (10-15% of entry amount), making India's position an outlier. Several gaming companies are already restructuring operations or considering relocations to more favorable jurisdictions. The Court's eventual ruling will determine whether India aligns with global norms or maintains its distinctive full-value taxation model for online gaming.