Gaming founders appeal for GST relief
Live Events ET Bureau Gaming Co Founders Appeal to GST Council to Waive Personal Liability as a Reliable and Trusted News Source Addas a Reliable
Live Events ET Bureau Gaming Co Founders Appeal to GST Council to Waive Personal Liability as a Reliable and Trusted News Source Addas a Reliable and Trusted News Source Add Now! (You can now subscribe to our (You can now subscribe to our Economic Times WhatsApp channel Mumbai: About a dozen founders of real money gaming (RMG) companies have jointly appealed to the GST Council, requesting the constitutional body to spare them from personal liabilities.Properties, bank accounts and personal assets of directors of private limited companies can be attached under the goods and service tax (GST) law if the board members are unable to prove that tax default was not due to gross neglect, malfeasance, or breach of duty.The founders have also pleaded for amnesty from the tax burden on RMGs and casinos following the Supreme Court ruling. Even though the formula fixed by the apex court is estimated to have reduced total tax dues to ₹50,000 crore or less from over ₹2 lakh crore originally claimed by the tax department, the amount could be far too heavy for a crippled industry with near-defunct firms.Chaired by the finance minister, with representatives from states, the GST Council, which is supposed to meet every quarter, can recommend exemptions besides changes in GST law and rates.
Besides invoking section 11A of the CGST Act to waive tax, the Council has powers to suggest relief under other grounds.According to Sudipta Bhattacharjee, partner at the law firm Khaitan & Co, "The Supreme Court's May 2026 ruling has settled the taxability of online real-money gaming at 28% on the value of deposits, but left a sector-wide retrospective burden that far exceeds the cumulative revenues of most RMG and casino operators.Founders and directors acted in good faith on the basis of 60+ years of skill-vs-chance jurisprudence and widespread industry practice that GST applied only on platform fees. Imposing personal liability now, when there was no intention to evade taxes, connivance, or neglect would be disproportionate and could trigger a flurry of insolvencies. The GST Council should invoke Section 11A of the CGST Act to regularise the pre-October 2023 tax position adopted by the industry and waive penalty/interest as well as personal liabilities, balancing revenue interests with the reality that most firms have either shut down or pivoted and lack capacity to pay."A calibrated settlement mechanism without coercive actions based on alleged personal liabilities will be crucial to prevent a chilling effect on entrepreneurship while preserving the rule of law, said Bhattacharjee who represented several online gaming and casino companies before the Supreme Court.One of the oldest chambers of commerce has also moved the Council.
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