Directorate General Of Goods And Services Tax Intelligence (HQS) V. Gameskraft Technologies Private Limited 2026 INSC 595 GST On Actionable Claims - Betting And Gambling Transactions

Constitution of India – Articles 246A and 366(12A) ; Central Goods and Services Tax Act, 2017 - (i) The levy of GST on actionable claims arising from betting and gambling transactions is constitutionally valid, within the legislative competence conferred by Article 246A of the Constitution, and consistent with the statutory framework embodied in the CGST Act, 2017 and the corresponding State GST enactments. [Context: SC rejects challenge to the constitutional and statutory validity of Sections 2(31), 2(52), 7, 9 and 15 of the CGST Act, 2017, the corresponding provisions of the State GST enactments, and Rules 31A and 31B of the CGST Rules, 2017, together with the notifications, circulars and executive instruments issued in furtherance thereof] (Para 86)

Central Goods and Services Tax Act, 2017 -The amendments introduced by the Central Goods and Services Tax (Amendment) Act, 2023, including the amendments to Entry 6 of Schedule III and insertion of Rules 31B and 31C, are clarificatory and explanatory in nature and shall operate retrospectively in the manner indicated hereinabove. (iv) Organised online gaming activities, including fantasy sports and analogous gaming formats involving pooled stakes, give rise to actionable-claim supplies exigible to GST under the statutory framework governing betting and gambling transactions (v) Insofar as casino transactions are concerned, recourse to Rule 31 and adoption of best judgment methodologies under the pre-amendment framework cannot be said to be impermissible in the absence of complete and reliable contemporaneous records. However, the ultimate determination and computation of taxable value shall stand governed by Rule 31C in accordance with the principles laid down hereinabove. (vi) Pending show cause notices, adjudication proceedings and consequential demands relating to online gaming, fantasy sports and casino transactions shall accordingly be considered and decided in accordance with the valuation framework embodied in Rules 31B and 31C of the CGST Rules, as applicable, and the findings recorded in the present judgment. (Para 86)

Interpretation of Statutes -Retrospective operation of clarificatory, declaratory and validating amendments discussed- where an amendment is intended to clarify and set at rest an overbroad interpretation of an earlier provision, such amendment is clarificatory and therefore retrospective in nature. (Para 66)

Constitution of India - Article 32, 226 - Where a legislation is challenged on the ground of being ultra vires the Constitution, one of the primary considerations is to ascertain whether the subject matter of the enactment, in pith and substance, falls within the legislative competence of the legislature concerned. Once legislative competence is established, the Court must then examine whether the enactment transgresses any constitutional limitation or prohibition. In fiscal matters, greater latitude is ordinarily available to the legislature so long as the levy remains traceable to a constitutionally recognised field of taxation. (Para 50.13)