Supreme Court Resumes GST Hearings in Gameskraft Case – Day 11 Key Highlights
By Aaerm Law Associates | May 22, 2025
🏛️ Background
The Supreme Court of India resumed hearings on May 21, 2025, in the Gameskraft batch of GST-related cases. These hearings focus on the taxability of online gaming platforms under the GST regime.
Senior counsel, appearing for the Federation of Indian Fantasy Sports (FIFS), continued his submissions. He emphasized previous legal rulings and government audit findings that classify fantasy sports as games of skill, not gambling.
This case holds significant weight for the gaming industry. It may impact over ₹1.5 lakh crore in retrospective tax claims made by the government.
⚖️ Key Legal Arguments – Day 11
1. ✅ Judicial Support for Fantasy Sports as Games of Skill
To begin with, counsel cited 14 High Court and Supreme Court judgments. These rulings have consistently held that fantasy sports, including Dream11, involve skill rather than chance.
Importantly, he noted that several Public Interest Litigations (PILs) and appeals against Dream11 were rejected. One notable example is Varun Gumber’s review petition, which was dismissed on the grounds of delay and lack of merit.
2. 📊 Audit Reports Support Industry’s Stance
Next, the counsel pointed to two audit reports from the GST department. Both documents confirmed that Dream11’s business model involves skill-based games.
These audits clearly stated that prize money in fantasy sports does not qualify as an actionable claim under gambling laws. This strengthens the industry’s position that such platforms should not attract GST under current laws.
3. 🧾 Previous Government Findings & RTI Evidence
He also mentioned that a past show-cause notice, issued under the service tax regime, had been withdrawn. Authorities concluded that Dream11 was not involved in wagering or betting.
Furthermore, a Right to Information (RTI) reply aligned with the Rajasthan High Court’s view. The Ministry of Finance accepted this verdict and chose not to appeal, reinforcing the finality of the decision.
4. 💸 Potential Economic Disruption
The counsel cautioned that upholding the retrospective show-cause notices could be disastrous. He argued that this might deter foreign investment, disrupt operations, and cause widespread job losses in India’s rapidly growing fantasy sports sector.
While the industry complies with the new 28% GST structure introduced in 2023, these past demands risk derailing legitimate businesses.
🧠 Constitutional Challenges & Broader Legal Interpretation
Another senior counsel appeared for the platform Vision11 and highlighted how the 2023 GST amendments created an entirely new category called “online money gaming”.
He stated that before 2023, the law did not distinguish between different forms of online games. Hence, fantasy sports platforms were not liable for GST. The amendment, through a proviso in the Act, now requires platforms to pay GST on behalf of the players.
Importantly, he challenged Rule 31A(3) of the CGST Rules as unconstitutional. He argued that the rule confuses the phrase “gambling and betting” and violates Article 14 of the Constitution by grouping skill-based games with chance-based games.
He also mentioned that the industry has paid 28% GST on initial deposits since October 1, 2023, following Rule 31B, which was introduced to clarify taxation for online gaming and casinos.
In response to the ASG’s claim that the 2023 amendments were surplusage, counsel rebutted this by explaining that new definitions and obligations were introduced for the first time. This, he said, proves that prior taxing power was unclear.
📅 What’s Next? Supreme Court’s Schedule
The bench confirmed that the hearings will continue on May 22, 2025. After the court’s summer vacation, further submissions will be heard. A consolidated reply by the Additional Solicitor General (ASG) will follow.
The final judgment is expected to shape the regulatory and tax framework for India’s entire online gaming ecosystem.
📝 Conclusion
In summary, Day 11 of the Gameskraft hearing reiterated the fantasy sports industry’s consistent compliance and reliance on judicial backing. The arguments presented reflect not just a legal but a constitutional and economic dimension to the issue.
If the court rules in favor of the industry, it could prevent further litigation, stabilize tax expectations, and support India’s booming digital gaming economy. However, the risk of retrospective demands remains a cloud over the sector’s future.
