Supreme Court Upholds Retrospective GST on Online Gaming and Gambling

The Supreme Court (SC), in a series of appeals involving the case of Gameskraft Technologies and Others, has ruled that organized online gaming activities, including fantasy sports and analogous gaming formats involving pooled stakes, give rise to actionable-claim supplies that are subject to goods and services tax (GST). Furthermore, the 2023 amendments provide greater clarity on the valuation and collection of GST from such activities, and have been held to apply retrospectively (for previous reporting, seeIndian Apex Court Stays High Court Decision Holding Online Games of Skill Not Gambling/Betting (11 September 2023) and Indian High Court Rules Online Games of Skill Not Gambling/Betting (23 May 2023)).

Gameskraft

(a) Facts. This decision arose from a batch of appeals and petitions. The taxpayers (comprising online gaming companies, casino operators and others) received notices from the GST authorities demanding tax at 28% on the total face value of bets or stakes placed by players, rather than solely on the platform fee or commission charged by the operators.

(b) Issue. The SC examined the constitutional validity of taxing online gaming, fantasy sports and casinos as supplies of actionable claims arising from betting and gambling under the GST framework. Other key issues examined include whether taxable consideration encompasses the total stake amount and whether the 2023 amendments (which clarified valuation and collection), apply retrospectively.

(c) Decision. The SC ruled in favour of the GST authorities with the following key observations:

  • organized gaming and betting platforms establish and operate the commercial ecosystem within which participants acquire contingent beneficial interests in movable property arising from betting and gambling transactions involving uncertain outcomes. These contingent interests constitute actionable claims. In effect, money staked on an uncertain outcome is treated as betting and gambling for GST purposes. Thus, the SC settled the debate over a "game of skill" vs. a "game of chance";
  • the amount staked or otherwise contributed toward participation in gameplay constitutes "consideration" for GST purposes. This taxable amount includes the entire stake without excluding or deducting prize pools, winnings, payouts or similar components. Consequently, GST at 28% is payable on the total stake deposited by a player, not merely on the platform fee or commission;
  • the levy of GST on actionable claims arising from betting and gambling transactions is constitutionally valid. The 2023 amendments are clarificatory and explanatory in nature, operating retrospectively. They do not introduce a new levy or taxable event but instead provide statutory specificity and operational clarity regarding valuation and collection mechanisms for online gaming and casino transactions; and
  • online gaming companies cannot be regarded as mere intermediaries, as they exercise control over games, prize pools, wallets and related elements. Accordingly, they are to be classified as primary suppliers.

The full text of the SC's judgement in Directorate General of Goods and Services Tax v Gameskraft Technologies Private Limited (Civil Appeal Nos. 8241–8244 of 2026) dated 27 May 2026 is available here.

Note: The GST rate on specified actionable claims including betting, casinos, gambling, horse racing, lottery and online money gaming has been raised to 40% (from 28%) effective 22 September 2025 (for previous reporting, seeIndia Approves Major Rate Overhaul: Slashes GST on Essential Goods, Levies 40% on Sweetened Beverages, Luxury and Sin Goods (4 September 2025)).

Report from our correspondent Urvi Asher, Chartered Accountant, India. Follow our reporting on this via our daily Tax News Service (subscribers only).