Supreme Court decision on gambling taxation in India

Supreme Court decision on gambling taxation in India

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Supreme Court decision on gambling taxation in India

A Supreme Court policy on gambling taxation in India is being eagerly watched by legal analysts because it might have a big impact on an industry already suffering with regulatory uncertainty and inconsistent tax laws across the country.

The main point of concern is the twenty-eight percent tax that casino operators are subject to as a result of the Goods and Services Tax (GST). The Supreme Court’s decision will establish the validity of this tax and could have a significant impact on the future of the online gambling market in India.

In a recent legal research, Shankey Agrawal and Lopamudra Mahapatra of BMR Legal outlined the difficulties that the online gambling sector faces. They mentioned how the industry’s post-pandemic income growth had increased exponentially and drawn lawmakers’ notice. But the industry is facing enormous tax obligations of billions of dollars, which seriously jeopardise its sustainability.

India has historically disapproved of gambling and betting, leaving state-level regulation to take place. The fact that governmental levies have not applied to skill-based games emphasizes the difference between chance-based and skill-based games.

The legal environment of the sector is complicated, as demonstrated by the classification of online rummy as a game of skill that is protected under constitutional laws. Despite legal precedents favoring skillbased games, the GST Department has imposed tax demands on gambling companies during the 50th GST Council meeting, equating online gambling with gambling.

Temporary relief was granted by the Karnataka High Court in favour of the taxpayers, while the Supreme Court rendered a final decision. Those in the industry are hoping for a favourable decision that takes into account the complexities of taxing online gambling as the Supreme Court gets ready for its final session. The court’s ruling will determine the industry’s future, and it is anticipated that the outcome will secure the sector’s expansion and sustainability going forward.

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