Archive · 2 Jun 2025
GST Litigation in India: Cases, Disputes and Strategies
GST, a new tax system, has led to many legal battles.
Some disagreements are about taxes on things like online games and salaries for foreign workers.
Companies and the government disagree on how some rules should be followed.
Disputes often concern the denial of tax credits.
The lack of a special court to solve tax disputes has caused issues.
There are discussions about whether online games are games of skill or gambling, which affects how much tax is paid.
To solve these problems, clear rules, records, and quicker ways to solve disputes are needed.
Significant litigation has arisen under GST due to unsettled laws and divergent interpretations.
Disputes frequently concern the denial of input tax credit (ITC).
The taxability of transactions, such as salaries for foreign nationals, is another source of dispute.
Online gaming tax classification has evolved into a valuation dispute, with high tax demands.
Disagreements exist over the tax treatment of royalties for mining leases.
- Who
- Taxpayers and GST authorities are involved in GST litigation.
- What
- Significant litigation under Goods and Services Tax (GST) concerning issues like input tax credit (ITC), taxability of transactions, and online gaming.
- When
- Over seven years since GST implementation.
- Where
- India
- Why
- Disputes arise due to unsettled laws, divergent interpretations, and the non-operational status of the GST Tribunal.
Taxpayers
GST Authorities
Tax on Online Gaming
Taxpayers
The online gaming industry maintains that GST at 18% is applicable only on platform service charges, treating the activity as a game of skill.
GST Authorities
GST authorities treat the entire transaction as ‘betting and gambling,’ liable to a higher GST rate of 28%.
Tax on Royalties for Mining Leases
Taxpayers
Royalty is a tax and, as such, tax cannot be levied on tax.
GST Authorities
Royalty is not a tax but rather a consideration for the loss of minerals incurred by the Government in parting with its exclusive rights.
- GST Implementation
- Over seven years ago
- Main Disputes
- ITC denial, taxability of transactions, online gaming
- Online Gaming Tax
- Debate over 18% vs 28% GST rates
- Royalties Dispute
- Unresolved issue carried over from previous tax regime
- Authors
- Smita Singh and Prateek Sagar