Bangalore, October 28
The Karnataka High Court has said that if it is proven that the same games which have already been labeled as “games of skill” by the courts, the tax notice of Rs 21,000 crore on a gambling company in line will not go anywhere.
The notice of indictment 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 in the High Court by the society.
The September 8 notice sought to impose a 28% GST on the company’s transactions. The company, in its submission to the high court bench of Judge SR Krishna Kumar, argued on Thursday that the platform only offers “games of skill” and not “gambling”.
Rummy, considered a “game of skill” by several high courts and the Supreme Court, accounted for 96% of games played on the online platform.
Senior Counsel Abishek Manu Singhvi made the submissions on behalf of the company. He also argued that in an earlier case between the All India Gaming Federation and the state of Karnataka, the very games on the platform were considered a “game of skill” by the court. It was also said that the platform had already paid Rs 1,500 crore in taxes.
Lead attorneys Mukul Rohtagi and Arvind Datar appeared on behalf of the intervenors in the case on Thursday. A federation of online gaming applications has rejected a request to intervene.
When asked whether tax officials had jurisdiction to decide the nature of the games played, the Deputy Solicitor General argued that the opinion contained a detailed statement of reasons. GST Intelligence claimed that the platform is used for gambling.
The high court had previously granted on September 23 a stay of the opinion issued by GST Intelligence. The hearing will continue on Friday.