On May 5, 2025, the Directorate General of GST Intelligence (DGGI) informed the Supreme Court that online gaming platforms offering real-money games are engaging in activities equivalent to betting and gambling, thereby attracting a 28% Goods and Services Tax (GST) on the full value of bets placed by users.

Additional Solicitor General N. Venkataraman, representing the government, emphasized that the focus is not on the games themselves but on the “speculative outcomes” associated with them. He argued that whether a game is of skill or chance is irrelevant when money is staked on uncertain outcomes, classifying such activities as gambling under GST laws .

This stance follows the government’s 2023 clarification that, effective October 1, 2023, a uniform 28% GST applies to all online games involving betting and gambling, calculated on the full face value of bets. The DGGI has issued show-cause notices totaling approximately ₹1.12 lakh crore to various online gaming companies and casinos for alleged tax evasion .

The Supreme Court is currently hearing a batch of petitions from online gaming firms challenging this tax policy, arguing that GST should be levied only on their gross gaming revenue (platform fees), not on the total amount staked by users. The final judgment in this case is expected to have significant implications for the online gaming industry’s taxation framework in India.

Sources