Indian court decision broadens tax crackdown on games of skill

(AsiaGameHub) –   India’s Supreme Court has ruled that skill-based activities like poker, fantasy sports, and rummy ought to be categorized as gambling for tax-related purposes, and thus should be subject to the nation’s 28% Goods and Services Tax (GST) rate.

The court has also backed the government’s position that applying GST retroactively means taxpayers must pay taxes on the total sum they wager rather than the revenue they earn from betting activities.

This decision allows tax authorities to recoup tax revenues dating back before the 2023 GST law was enacted. Estimates from local news sources suggest the gaming industry’s total liability is roughly $14 billion.

The court noted that neither skill nor luck determines whether an activity is considered betting or gambling; instead, betting and gambling involve uncertainty about future outcomes and placing a monetary wager on those unknowns.

Many online gaming operators are pushing back against classifying skill-based games as gambling and disagree with the retrospective application of the 28% GST.

These companies have also expressed concern that treating skill games like gambling could negatively impact their future business operations.

However, the Supreme Court stated that the GST regime is neither arbitrary nor unconstitutional.