The article discusses the taxability of online/digital rummy played on Gameskraft Technologies’ platform under the CGST Act. The conclusions are based on a legal case and the court’s analysis of the distinction between games of skill and games of chance.

According to the court’s decision in the All India Gaming Federation v. State of Karnataka case, games like rummy, whether played online or offline, with or without stakes, are considered games of skill. The court emphasizes the test of predominance in determining whether a game is skill-based.

The article points out that wagering contracts are acknowledged as part of business under Section 2(17) of the CGST Act. However, lottery, betting, and gambling are not considered the same as games of skill, and their interpretation under Entry 6 of Schedule III excludes games of skill.

Terms like “betting” and “gambling” are not applicable to online rummy on Gameskraft and similar skill-based games, whether played with or without stakes, according to the article. Taxation of games of skill falls outside the scope of “supply” under Section 7(2) of the CGST Act, and Entry 6 in Schedule III excludes actionable claims related to games of skill from the purview of goods or services.

The article provides background on the legal journey of the case involving Gameskraft Technologies Pvt. Ltd., highlighting the company’s platform fee, GST deposition, and the alleged involvement in betting and gambling. The court’s analysis involves a comprehensive examination of provisions in the CGST Act, emphasizing the retroactive amendment of Section 7.

The court’s findings suggest that activities akin to wagering are included in the definition of “business” under Section 2(17), considering the rule of ejusdem generis. The article delves into the definition and scope of “betting and gambling,” emphasizing that Schedule III explicitly excludes them from actionable claims for taxation purposes.

Referring to the State of Karnataka v. State of Meghalaya case, the article draws parallels between the Constitution and the CGST Act, concluding that terms like “betting” and “gambling” in Schedule III should be interpreted similarly. The court dismisses arguments against rummy played with stakes, asserting that it involves skill and value judgments, ultimately falling under the category of games of skill.

In summary, the article provides a detailed analysis of the legal perspective on the taxability of online/digital rummy on Gameskraft Technologies’ platform, emphasizing the distinction between games of skill and games of chance under the CGST Act.