RMG Firms Seek GST Relief Ahead of Sept 12 Council Meet

Real-money gaming (RMG) companies are seeking a way to resolve legacy GST liabilities ahead of the GST Council’s Sept 12, 2026, meeting. Their focus has shifted from the size of historical demands. The industry is now seeking a statutory route to settle these liabilities before companies face individual adjudication, penalties, interest, and recovery proceedings.

The issue follows the Supreme Court’s Gameskraft judgment, which changed the basis for determining taxable value.

Earlier revenue methodology had produced potential demands of nearly INR 2.5L Cr across the sector. The court directed authorities to apply Rule 31B to determine the taxable value. Under the rule, player deposits are considered for valuation, while winnings reused for gameplay without withdrawal and redeposit are not treated as fresh deposits.

Section 11A Emerges as RMG’s GST Relief Route

The industry is seeking intervention under Section 11A of the Central GST Act, which covers tax that was unpaid or short-paid because of a generally prevalent trade practice. Lawyers representing the sector argue that operators followed a common valuation methodology based on legal opinions and underwent regular assessments without interpretive objections.

Advocate & Solicitor, Gowree Gokhale, argued that the sector operated under a common legal premise supported by senior-counsel opinions and tax assessments. CBIC was also reported in June 2026 to be preparing rules to operationalize Section 11A.

However, it had not decided whether the provision would apply to the online gaming sector.

RMG Founders Face a Separate Liability Concern

Around a dozen founders have separately sought protection from personal exposure linked to retrospective GST demands, interest, and penalties. The concern is particularly relevant for businesses that have closed or reduced operations following the August 2025 intervention.

An immediate amnesty is not assured.

The Council can recommend relief, but statutory backing could be required to reduce or extinguish crystallized liabilities. Without it, companies could enter company-specific adjudication and litigation.

Coda Payments Ruling Adds Legal Context

Separately, the Bombay High Court on Sept 2, 2026, quashed the ED’s freeze of about INR 100 Cr in Coda Payments India’s assets. The court found no established nexus between the frozen property and the alleged offense. The underlying 10 FIRs involved about INR 25L, with nine closed or settled and one involving INR 85,650.

The court also rejected the use of gross turnover or foreign remittances alone to justify freezing assets, while clarifying that it was not ruling on whether Coda committed the alleged offenses.

For the gaming sector, the ruling provides a reference point for challenging disproportionate asset freezes. Its implications for cases involving companies such as Gameskraft, WinZO, and Probo will depend on their individual facts.