Supreme Court upholds 28% retrospective GST on online gaming

📌 Summary:

• SC (May 27, 2026) upheld constitutional validity of the Centre's retrospective 28% GST levy on online real-money gaming companies
• Bench: Justices JB Pardiwala and R Mahadevan dismissed petitions filed by gaming companies and industry bodies challenging GST regime and retrospective tax notices
• Revives tax demands worth nearly Rs 2.5 lakh crore against gaming firms, fantasy sports platforms and casinos
• Major companies impacted: Dream11, GamesKraft and others
• The 28% rate applies on the full face value of bets, not on Gross Gaming Revenue (GGR) — earlier dispute was that gaming firms wanted GGR-only taxation
• The ruling comes on top of the Centre's 2025 ban on real-money gaming — could "spell the end of the road" for the online gaming sector

🎯 UPSC Relevance: GS3 Indian Economy — GST architecture, retrospective taxation, taxation vs ease-of-business trade-off; GS2 Governance — regulatory framework for digital gaming sector.

📝 Prelims Facts:

• GST Council — Article 279A; chaired by Union Finance Minister
• 28% slab is the highest GST rate; applied to luxury & demerit goods
• "Actionable claim" — gaming chips/stakes legally classed here; this classification underpinned the 28% levy
• 2025 — Centre's blanket ban on real-money gaming
• Rs ~2.5 lakh crore — combined tax demand revived

🔑 Key Term: Retrospective Taxation — a tax law applied to transactions or events that occurred before the law was enacted. Long-criticised for damaging investor confidence; SC's endorsement here is significant.