Directorate General of GST Intelligence v. Gameskraft Technologies Pvt. Ltd.
Supreme Court of India, 27 May 2026, 2 judges, 2026 INSC 595
Online gaming, fantasy sports and casino activity played for stakes is betting and gambling for GST; GST on the resulting actionable claims, on the full stake value, is valid, and the 2023 amendments and Rules 31B and 31C apply retrospectively.
Facts
The Directorate General of GST Intelligence issued show cause notices under Section 74(1) of the CGST Act, 2017 to Gameskraft and others, alleging that they had evaded GST by treating supplies relating to betting as services rather than actionable claims. The Karnataka High Court quashed the notices on 11.05.2023, and the Revenue appealed. Online gaming platforms, fantasy sports operators and Goa casino operators who had received similar notices filed writ petitions under Article 32, and other cases were transferred to the Supreme Court. Platforms had paid 18% GST only on the platform fee, casinos 28% on gross gaming revenue. They challenged Sections 2(52), 9(1), 15(5) and Rule 31A, and disputed applying the 2023 amendments and Rules 31B and 31C to earlier periods. A criminal appeal against a Bombay High Court judgment treating Dream 11 contests as games of skill, and an appeal about a gaming licence, were heard with them.
Questions before the Court
- Whether online games, including fantasy sports, played for stakes on uncertain outcomes are betting and gambling for the GST framework.
- Whether taxing actionable claims arising from betting and gambling under Sections 2(52), 7, 9 and 15 of the CGST Act is within Article 246A and consistent with Articles 14, 19(1)(g), 21, 265 and 366(12A).
- Whether the whole stake is consideration and whether Rule 31A of the CGST Rules is intra vires and not arbitrary.
- Whether the 2023 amendments, including Rules 31B and 31C, are clarificatory and retrospective, and how pending notices against gaming operators and casinos are to be valued.
What the Court held
- Betting and gambling lie in staking money or money's worth on uncertain outcomes, whether the underlying game is one of skill or chance. Online games, including fantasy sports, played for such stakes are betting and gambling for the purposes of GST.
- GST on the supply of actionable claims arising from betting and gambling is traceable to Article 246A and does not breach Article 366(12A). Sections 2(31), 2(52), 7, 9 and 15 are valid, and the challenges under Articles 14, 19(1)(g), 21 and 265 fail. The levy is on the supply of actionable claims, not on betting itself.
- Supply under Section 7 is not limited to transfer of an existing actionable claim. Gaming platforms create the contingent beneficial interests that are actionable claims and are suppliers, not mere intermediaries. The amount staked is consideration, and prize pools or winnings cannot be deducted.
- Rule 31A is a valid machinery provision within the Act. It creates no fresh levy and is not manifestly arbitrary, since fiscal laws allow greater latitude in valuation.
- The 2023 amendments to Entry 6 of Schedule III and Rules 31B and 31C are clarificatory and retrospective. Pending notices are to be decided under Rules 31B and 31C. For casinos, recourse to Rule 31 and best judgment assessment is upheld, but computation is left to the adjudicating authority under Rule 31C.
- The writ petitions and transferred cases were dismissed. The Karnataka High Court judgment was set aside and the notices restored, with time fixed for replies and orders. The Bombay High Court judgment was set aside to the extent it held the Dream 11 transactions outside taxable supply.
Why it matters
The judgment settles the GST treatment of online real money gaming, fantasy sports and casinos. Applying the connected Junglee Games ruling, it holds that the skill or chance character of a game does not matter once stakes are placed, treats the platform as the supplier of actionable claims, takes the full stake as the taxable value, upholds Rule 31A, and treats the 2023 amendments and Rules 31B and 31C as clarificatory and retrospective.
In the Court's words
Copied from the official judgment; each passage links to its page.
“The conclusions recorded in the connected judgment leave no room for doubt as to the correct legal position. Applying the principles enunciated therein, this Court holds that where online games, including games predominantly involving skill, are played for stakes, the activity attracts the essential characteristics of betting and gambling for the purposes of the impugned levy.”
“The legislative scheme embodied in the CGST Act, 2017 and the corresponding State enactments validly subjects actionable claims arising from betting and gambling to GST. The provisions embodied in Sections 2(31), 2(52), 7, 9 and 15 of the CGST Act, insofar as they operate upon actionable claims arising from betting and gambling, are constitutionally valid and clearly traceable to the legislative competence conferred by Article 246A of the Constitution. The levy is upon the taxable supply of actionable claims and not upon the activity of betting or gambling simpliciter.”
“Rule 31A of the CGST Rules is intra vires the provisions of the CGST Act and constitutes a valid machinery provision enacted to operationalise the valuation framework inhering in Sections 9 and 15 of the Act read with Entry 6 of Schedule III and other connected provisions. The Rule neither creates a fresh levy nor enlarges the charging provisions of the statute.”
“The amendments introduced in 2023, including the amendments to Entry 6 of Schedule III and insertion of Rules 31B and 31C, are clarificatory and explanatory in nature and consequently retrospective in operation in the manner indicated hereinabove. The said amendments neither create a fresh levy nor introduce a new taxable event for the first time, but merely provide greater statutory specificity and operational clarity in relation to valuation and collection mechanisms governing online gaming and casino transactions.”
Provisions interpreted
- Sections 2(31) and 2(52), CGST Act, 2017
- Section 7, CGST Act, 2017
- Section 9, CGST Act, 2017
- Section 15, CGST Act, 2017
- Entry 6, Schedule III, CGST Act, 2017
- Rules 31A, 31B and 31C, Central Goods and Services Tax Rules, 2017
- Article 246A, Constitution
- Article 366(12A), Constitution
Related judgments
- Follows Union of India v. Mohit Minerals Pvt. Ltd. (2022)“This position stands authoritatively affirmed in Union of India v. Mohit Minerals Pvt. Ltd.” (page 291)
Case and bench
- Parties
- Directorate General of Goods and Services Tax Intelligence (HQS) v. Gameskraft Technologies Private Limited
- Case
- Civil Appeal Nos. 8241-8244 of 2026 (arising out of SLP (C) Nos. 19366-19369 of 2023), with connected civil and criminal appeals, writ petitions and transferred cases
- Decided
- 27 May 2026
- Bench
- J.B. Pardiwala, R. Mahadevan
- Opinions
- Unanimous. Judgment of the Court written by R. Mahadevan, J., signed by both judges. It is to be read with the connected judgment of the same Bench in State of Tamil Nadu v. Junglee Games India Private Limited.