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1 week ago
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ARTICLE AD BOX
Summary
Online gaming platforms saw their argument on GST levies turfed out by India’s judiciary last month. There’s a lesson in the Supreme Court’s ruling for taxpayers on how a consumption tax like GST works.
Late last month, the Supreme Court of India rejected the argument of online gaming platforms that the goods and services tax (GST) they pay should be calculated on what they call ‘gross gaming revenue’ (GGR)—the money left with them after they distribute winnings—and not on what customers shell out.
The court ruled that GST is a tax on supply and hence must apply to the transaction value, and the outcome of it should be immaterial. This was a blow not just for India’s money-betting platforms that wanted just their fees taxed, but also casinos that operate on a similar model.
By law, GST is levied on the sales turnover of taxable supplies, but the gambling-service industry sought to define what that means for it. Its contention was premised on the unique nature of bets where much of the money collected is awarded to winners. This isn’t so for other businesses.
But the industry’s argument has fallen flat and it can’t wriggle out of a larger tax liability. That gaming should be subject to a higher-than-usual GST rate is easy to justify too. It is the very opposite of an essential service, even if addicts argue otherwise. Such businesses play a role in the economy, but must pay their fair share of taxes.
English (US) ·