The Supreme Court has received a special leave plea from the Union finance minister challenging a Karnataka High Court decision that nullified a GST claim of Rs 21,000 crore against online gaming business Gameskraft. 

The Supreme Court is reportedly planning to announce the hearing date within the next three to four days. 

Sanjay Malhotra, the Union Revenue Secretary, said that the Centre submitted the SLP on August 1. When discussing the choices made by the GST Council with media on Wednesday, Malhotra stated that the GST adjustments for online gambling, horse racing, and casinos will be prospective. 

Sanjay Malhotra, the Union Revenue Secretary, said that the Centre submitted the SLP on August 1.

Sanjay Malhotra, the Union Revenue Secretary, said that the Centre submitted the SLP on August 1. When discussing the choices made by the GST Council with the media on Wednesday, Malhotra stated that the GST adjustments for online gambling, horse racing, and casinos will be prospective. 

“Amendments are prospective. But as mentioned earlier, this amendment is more of a clarification as betting has been included as actionable claims and even online gaming and betting are in nature of betting,” he said, adding that they are taxable at 28%.

“The Karnataka High Court has not upheld the stance. We have filed an SLP yesterday and whatever is decided by the Supreme Court will prevail,” he said after the 51st meeting of the GST Council.

In May, a single-judge Karnataka High Court bench dismissed a Rs 21,000 crore GST show-cause notice issued to Gamekraft Technologies Private Ltd. of Bengaluru. According to the Directorate General of GST Intelligence, the corporation pushed online betting, and between 2017 and June 30, 2022, these actions cost Rs 77,000 crore. It had asked for 28% GST to be paid on the total amount received, which the firm had contested.

In its 51st meeting, the GST Council proposed changes to the CGST Act 2017 and the IGST Act 2017, including changes to Schedule III of the CGST Act, 2017, to make it clearer how supplies for casinos, horse racing, and online gaming are taxed. The reforms are anticipated to be introduced in Parliament during this session, and it's also probable that states will do the same during their existing assembly sessions. Other states are anticipated to pass an Ordinance to begin enforcing the tax on October 1.

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