The Supreme Court’s ruling upholding 28% retrospective GST (goods and services tax) on online gaming firms has shifted the focus from a years-long legal battle to the next big question facing the sector: how and when tax demands of nearly Rs 92,000 crore could crystallise into liabilities.
Wednesday’s ruling, backing tax demands on past transactions, could have major financial implications for the sector.
A lawyer representing one of the large gaming companies involved in the dispute said platforms will now have an opportunity to individually respond to the GST department’s show-cause notices.
“Given the government’s stance, it is likely that the tax department will move ahead with demanding back taxes,” the lawyer said. “Companies can seek a review of the Supreme Court’s order before a larger bench. Even if the GST department issues demand notices, the option to appeal the order remains open.”
