The High Court of Karnataka has said that if it is proved that the same games which have already been decided as ‘game of skill’ by the courts, the Rs 21,000 crore tax notice on an online gaming company will go nowhere. The intimation notice of Rs 21,000 crore by the Directorate General of Goods and Services Tax (GST) Intelligence on the Karnataka-based online gaming platform Gameskraft, has been challenged before the High Court by the company.
The September 8 notice sought to impose 28 per cent GST on the company’s transactions. The company, in its submission before the HC bench of Justice SR Krishna Kumar, on Thursday argued that the platform only conducts ‘games of skill’ and not ‘games of chance.’ The game of Rummy, which has been held to be a ‘game of skill,’ by several high courts and Supreme Court constituted 96 per cent of the games played on the online platform. Senior Counsel Abishek Manu Singhvi made the submissions on behalf of the company. He also submitted that in an earlier case between All India Gaming Federation and State of Karnataka, the very games on the platform were held to be ‘game of skill,’ by the court. It was also submitted that the platform has already paid Rs 1,500 crore in taxes. Senior advocates Mukul Rohtagi and Arvind Datar appeared on behalf of intervenors in the case on Thursday. A federation of online gaming apps has failed an intervenor application. When asked whether the tax officers are competent to decide on the nature of the games played, the Deputy Solicitor General submitted that the notice contains a detailed reasoning for it. The GST intelligence has claimed that the platform is used for gambling. The HC had earlier on September 23 granted a stay on the notice issued by the GST Intelligence. The hearing will continue on Friday.