Lawyer Harish Salve Makes Case for the Legitimacy of 28% Goods and Services Tax (GST) in Constitutional Court

Sizzling GST Saga: The Battle over 28% Tax on Online Gaming

Lawyer Harish Salve Makes Case for the Legitimacy of 28% Goods and Services Tax (GST) in Constitutional Court

The hotly debated case about a 28% GST on online gambling has been ongoing for six days, and Advocate Harish Salve is challenging the constitutional validity of the GST component. The dispute revolves around Rule 31a of the CGST Rules, which establishes methods for determining the value of supply in gambling, betting, gaming, and horse racing activities, overriding general provisions under Section 15 of the CGST Act.

In a bold move, Advocate Harish Salve claims that online gaming companies fall outside the GST remit, as they mesh entertainment and gameplay that are essentially not supplies of goods or services. He believes these digital games should not be considered gambling for taxation purposes and should instead fall under Entry 97 of List I of the Constitution, instead of being subject to GST.

Petitioners maintain that this GST setup violates the 101st Constitutional Amendment, which stripped state governments of the authority to tax gambling and betting under Entry 62 of the State List.

Eye-opening Revelations:

Amidst the GST commotion, Gameskraft put the brakes on Pocket52, one of the biggest real-money gaming apps in India. Citing a 'strategic pause', they claim that they remain dedicated to the poker ecosystem. This halt stirs memories of the rocky times for the Indian poker industry when numerous providers shut down amid a reciprocal GST notice slapped on online gambling industries just a couple of years ago. As we near the final hearing later this month, the industry's future hangs in the balance.

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Roy D'SilvaA published author, Roy D'Silva has been on the scene for a decade, covering Bollywood, streaming services, and now poker. A bicycling enthusiast and passionate documentary watcher, Roy has his eyes set on breaking the biggest stories in the poker world.

What's Cooking in the Poker World?### Introduction to GST on Online Gaming

The heated conversation about slapping a 28% GST on online gambling continues in the Supreme Court, with the debate revolving around the taxation of online gaming activities and whether it violates the constitutional scheme[2]. Critics contend that the uniform application of such a high tax rate constitutes a legal flaw, with arguments that it lacks distinction between games of skill and games of chance[1].

Proposed Changes:

In this dispute, Advocate Harish Salve claims that online gaming companies do not fall within the GST remit, as they primarily offer gameplay and not supplies of goods or services[1]. Moreover, he argues that such taxation should fall under Entry 97 of List I of the Constitution, instead of being brought within the scope of GST.

The petitioners uphold that the action violates the 101st Constitutional Amendment[1], effectively removing state authorities to impose taxes on gambling and betting under Entry 62 of the State List.

The Poker Industry's Wild Ride:

The GST debate has shaken up the real-money gaming industry in India, as Gameskraft temporarily paused Pocket52, a huge online poker platform, citing a 'strategic pause.' This halt brings back chilling memories of the difficult times for the Indian poker industry when various providers shuttered due to a reciprocal GST notice targeted at poker real-money gaming companies only a couple of years back[2]. The final hearing in this case is on the horizon, and the industry awaits its fate with bated breath.

Tidbits:

• Goods and Services Tax (GST) is a comprehensive indirect tax levied on the supply of goods and services in India.
• The GST Council, a constitutional body, makes recommendations on taxation policies and administers GST.
• The 101st Constitutional Amendment extended the Central Government's taxation power over alcohol and tobacco products from solely Manipur, Meghalaya, and Mizoram to nationwide coverage.

[1] Raman, D. (2025, May). GST on online games: Better harmony needed between skill v chance in law. Bar and Bench.[2] Khandelwal, N. (2024, Dec). Stretching the boundaries of taxation: GST and online gaming. Live Law.[3] Gupta, A. (2025, May). India's real-money gaming industry on the brink: An analysis of the impact of GST. The Financial Express.[4] Verma, S. (2025, May). The future of GST for online gaming: What lies ahead. India Today.[5] Mehra, N. (2025, May). Gambling with numbers: Why the court case on GST on online gaming is heating up. The Economic Times.

1. The ongoing GST debate extends to the realm of online gaming, as Advocate Harish Salve proposes that technology-driven gaming platforms should be exempt from GST, as they primarily offer entertainment and not supplies of goods or services, falling under Entry 97 of List I of the Constitution.
2. As the poker industry grapples with the implications of the GST dispute, technology continues to play a crucial role. Gameskraft's decision to halt operations at Pocket52 underscores the industry's vulnerability, reminding us of the previous GST-related challenges that the sector faced a couple of years ago.

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