The Supreme Court on January 10, 2025 stayed the operation of showcause notices worth ₹1.12 lakh crore issued under Goods and Services Tax proceedings against online gaming companies1. A Bench of Justices J.B. Pardiwala and R. Mahadevan passed the order in separate petitions filed by 49 online gaming companies, and listed the case next on March 18, 20251.
The dispute concerns how GST applies to online gaming. The government, represented by Additional Solicitor General N. Venkataraman, argued that 28% GST must apply to the total contest entry amount, effectively taxing the entire prize pool1. The gaming companies contended that GST should only be levied on their platform fees or commission, as many of these games involve skill rather than chance1.
Advocate Abhishek A. Rastogi, who represented the companies, said a freeze on further action protected his clients from coercive action and ensured that demands made in the showcause notices were not time-barred1.
The case has a longer history. In January 2024 the top court issued notice to the Centre on a plea filed by the E-gaming Federation against the levy of 28% GST1. The court had earlier transferred to itself 27 writ petitions pending across nine State High Courts challenging the levy, tagging them with a pending case concerning a Karnataka High Court decision that quashed a GST showcause notice of ₹21,000 crore and held that online, electronic or digital Rummy played on Gameskraft was not taxable as betting or gambling1.
The GST Council had in 2023 recommended that online gaming, along with casinos and horse racing, must be taxed at a uniform rate, and decided against any distinction between games of skill and games of chance1.
"A Bench of Justices J.B. Pardiwala and R. Mahadevan passed the order in separate petitions filed by 49 online gaming companies."
A separate legal analysis published in September 2025 states that Parliament cleared the Promotion and Regulation of Online Gaming Bill, 2025 in August 2025, banning online money games outright irrespective of skill or chance, with penalties including fines up to ₹1 crore and three years' imprisonment for offering or facilitating such games, and up to ₹2 crore and five years for repeat offenders2. That analysis also states the Supreme Court stayed proceedings in January 2025 but that uncertainty remains2. The Hindu report of January 10, 2025 does not mention the 2025 Bill1.
What it means for players
The stay pauses enforcement of the tax notices while the court hears the case, so the underlying question of whether 28% GST applies to the full contest entry amount or only to platform fees remains unresolved1. For players in India, the practical effect is that the tax treatment of the money they stake is still undecided, and the amounts operators owe are not being collected during the freeze1. The September 2025 analysis states that the 2025 Bill prohibits online money games, including fantasy sports, rummy, poker and online casinos, and that there is no clarity on how players can recover funds already held in gaming wallets2. That analysis also states offenses under the Bill are cognizable and non-bailable2. The Hindu report does not address player balances or the Bill's provisions1.
What happens next
The Supreme Court has listed the case for March 18, 20251. The September 2025 analysis states that courts may test the constitutionality of banning skill-based games, and that the industry is expected to face contraction, job losses and a retreat from investors in the near term2.
For background on how gambling is regulated across the region, see Gambling Laws in Asia: What Is Legal in 12 Jurisdictions. For India specifically, see Can I Gamble in India? and What India's Online Gaming Ban Means for Players.
