The Karnataka High Court on Thursday quashed a Rs 21,000-crore GST notice against online gaming company Gameskraft Technologies. The notice was issued by the Directorate General of GST Intelligence in September 2022 after the company allegedly failed to pay taxes worth Rs 21,000 crore, with this being considered the largest amount accumulated in the history of indirect taxation.
Gameskraft was also accused of promoting online betting, but the company argued that its offerings qualified as skill-based gaming activities that included Rummy Culture and Gamezy. The leadership team of the company has members who have played an instrumental role in Indian tech giants like Flipkart, MakeMyTrip and Swiggy, and have contributed to global giants like Facebook, Google, Amazon, Walmart and Xiaomi.
The Bengaluru-based online skill-based gaming platform, which began operations in 2017, applauded the HC verdict and said it was 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,” said Joyjyoti Misra, group general counsel of Gameskraft.
Roland Lander, CEO of All India Gaming Federation, also expressed satisfaction over the verdict and called it a “landmark decision”. He said this decision would aid gaming startups across the country to work towards building the industry so as to ensure a healthy growth.
“Being the oldest and the largest industry body, and the voice of MSME gaming startups, and one of the intervenors in the case, we believe that a progressive and rational GST policy will boost investment within the sector and make this sunrise sector industry a cornerstone for the PM’s (Narendra Modi) vision of a $1-trillion digital economy,” Lander said.
He added: “We had and continue to have full faith in the government and the judiciary and are hopeful that this progressive decision will pave the way towards clarity and certainty from the GST Council in the policy for this sunrise sector.”
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