Karnataka HC passes landmark judgement by terminating Rs 21,000 crore Gameskraft GST Notice

Karnataka HC passes landmark judgement by terminating Rs 21,000 crore Gameskraft GST Notice – On May 11, Thursday, the Karnataka High Court terminated the show cause notice issued by the Directorate General of GST Intelligence (DGGI) to online gaming platform Gameskraft Technologies. This judgment was passed by Justice SR Krishna Kumar. Here is everything you need to know about this issue.

Karnataka HC passes landmark judgement by terminating Rs 21,000 crore Gameskraft GST Notice

On Sept. 8, 2022, the GST authorities issued a notice against Gameskraft and demanded Rs 21,000 crore for tax evasion. The company went to court challenging the decision and got granted a star on Sept. 23.

But the GST Intelligence authorities sent a show cause notice on the same day the court issued the interim stay to the tax demand claim of Rs 21,000 crore. The GST authorities had raised the tax demands after searching Gameskraft’s office in Nov. 2021 and accused them of evading taxes.

Justice SR Krishna Kumar passed the judgment and squashed the tax demand on hearing the petition from the Bengaluru-based online gaming platform.

The general counsel of Gameskraft, Joyjyoti Misra applauded the judgment and called it a “clear vindication” of the company’s business model. “We had and continue to have full faith in the government and the judiciary. We are hopeful that this decision will pave the way for constructive dialogues with the GST authorities and will form the basis of progressive GST regulations for the industry,” he said

Mr. Roland Lander, CEO of All India Gaming Federation also gave his thoughts on the issue.

“This landmark decision by the Hon’ble Karnataka High Court which reiterates six decades of jurisprudence will greatly aid gaming start-ups across India to work towards building the industry and ensure its healthy growth.

Being the oldest and the most significant industry body and the voice of the MSME gaming start-ups, and one of the intervenors in the case, we believe that a progressive and rational GST policy will boost investments within the sector and make this sunrise sector industry a cornerstone for Hon’ble PM’s vision of a 1 trillion-dollar digital economy. We had and continue to have full faith in the government and the judiciary. We are hopeful that this progressive decision will pave the way towards clarity and certainty from the GST Council in the GST policy for this sunrise sector.”

Many consider this judicial ruling would help the authorities to clearly differentiate between online gaming from games of chance involving betting and gambling.

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