PIL against Dream 11 alleging evasion of GST dismissed by Bom HC : Game of skill and not Game of chance

A Division Bench of the Bom HC has dismissed a PIL filed against online fantasy sports gaming portal Dream 11. The Petitioner, Gurdeep Singh Sacchar, had alleged large-scale evasion of GST by the Dream 11 by claiming the activities of Dream 11 are in the nature of gambling/betting/wagering and consequently, Rule 31A of the CGST Rules 2018 is applicable.

The High Court did not find merit in the pleas raised by the Petitioner and accepted the contentions of the advocates of Dream11 Mr. Vikram Nankani and Mr. Nikhil Rungta, who argued that the issue at hand as regards the nature of the activities undertaken by Dream 11 had already dealt with in detail by the Punjab and Haryana High Court in it own case wherein it was categorically held that Dream 11 is a game of skill and therefore, not in the nature of gambling, betting or lottery. Therefore, the question of applicability of Rule 31A of the CGST Rules does not arise at all.

While dismissing the PIL the High Court held that the Punjab and Haryana High Court had categorically held that these games are of skill and not games of chance. Various judgments have been referred to and relied upon in the said judgment and there is no reason to take a different view. It was further held that the allegation regarding the GST evasion or erroneous classification is directly based on the outcome of the issue whether Online Fantasy Sports Gaming is gambling or betting. Once it is held that the these are games of skill and not chance, there is no scope to infer possibility of any tax evasion.

Advocate (CA.) Vinay Shraff, GST Expert, opined that this is a forward looking judgement as it clears the air with regard to digital games and GST rate and upholds the spirit of the interplay of other laws with GST.

Compiled by -Adv.(CA.) Nipun Singhvi is practicing advocate at various Tribunals, High Courts and Supreme Court. He can be reached at nipunsinghvi@yahoo.com.

Read Full text of Hon’ble High Court Judgment at below link-

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December 2020