Key facts
- India's Supreme Court ruled that GST at 28% applies to the full face value of deposits in online money gaming.
- The court classified online money gaming activities as betting and gambling for GST purposes.
- The Supreme Court upheld the 2023 amendments to the CGST Act, deeming them clarificatory and applicable retrospectively.
- The ruling rejected the gaming industry's argument that GST should only apply to operator commissions (Gross Gaming Revenue).
- The court confirmed the constitutionality of the relevant CGST provisions and the new valuation rules.
India's Supreme Court has ruled that a 28% Goods and Services Tax (GST) will be levied on the full face value of deposits made by players in online money gaming, including rummy, poker, and fantasy sports. This landmark decision, delivered on May 27, 2026, in the case of Directorate General of GST Intelligence v. Gameskraft Technologies Pvt. Ltd., overturns previous interpretations that allowed companies to pay GST only on their retained commission (Gross Gaming Revenue).
The court clarified that the decisive factor for GST applicability is whether money is staked on an uncertain outcome, regardless of whether the game involves skill or chance. It affirmed that the 'chance to win' constitutes taxable 'goods' and that platform operators are suppliers, not mere intermediaries. The ruling also validated the 2023 amendments to the CGST Act, which introduced specific valuation rules for online money gaming, stating these were clarificatory and applied retrospectively.
This verdict significantly reshapes the economics of India's digital gaming industry, which has seen rapid growth. Companies will now need to adjust their compliance systems and pricing models to account for GST on the entire deposit amount. The court also upheld the constitutional validity of the relevant tax provisions.
Following the judgment, the government has already implemented a new tax regime, 'GST 2.0', which raised the GST rate on online money gaming to 40% from September 22, 2025, still applied to the full deposit value. The gaming industry is now looking to the government to potentially grant relief from past tax liabilities under Section 11A of the CGST Act, citing prevailing trade practices before the 2023 amendments.