Executive summary
Two major, separate developments have landed on foreign online gaming companies within weeks of each other in 2026. Neither is optional to address, and they pull in different directions — one is about the future, the other about the past.
What you need to know
- Online real-money gaming is now banned outright in India under the Promotion and Regulation of Online Gaming Act, 2025, which came into force on 1 May 2026. This applies regardless of skill vs. chance, and regardless of whether the platform is based in India or offshore.
- Continuing to offer, advertise, or facilitate payment for online money games to Indian users after that date carries criminal exposure, not just tax exposure — this is a materially different situation from ordinary GST non-compliance.
- Separately, the Supreme Court confirmed on 27 May 2026 that GST at 28% applies to the full face value of stakes (not platform fee or revenue) for the pre-ban period, and that this applies retrospectively — reviving demands industry-wide estimated at roughly ₹2.5 lakh crore.
- E-sports and non-monetary social gaming remain legal and are actively promoted under the same 2025 Act — this is a genuinely distinct category from what's now banned.
- If you operated a real-money gaming platform serving India at any point since 2017, your historical exposure is now confirmed, not theoretical — this is worth assessing urgently regardless of your current operating status.
If you are currently operating a real-money gaming platform serving India
This guide is informational, but your situation likely needs an urgent, specific conversation rather than general reading. See Section 6.
The 2025 ban — what's actually prohibited
This is a genuinely new, sweeping prohibition — not a tax change, and not limited to Indian companies.
The Promotion and Regulation of Online Gaming Act, 2025
Passed by Parliament in August 2025 (Presidential assent 22 August 2025), and brought into force on 1 May 2026 alongside the Promotion and Regulation of Online Gaming Rules, 2026. The Act prohibits all "online money games" — games played after payment of a fee or stake, with an expectation of winning money or other stakes — irrespective of whether the game involves skill, chance, or both. The long-standing legal distinction between games of skill and games of chance, which previously protected certain formats, has been explicitly eliminated for this purpose.
What this means for a foreign platform
- The Act applies regardless of where the platform is hosted. An offshore real-money gaming platform serving Indian users is squarely within scope — this is not limited to India-incorporated companies.
- Offering the service is prohibited, with penalties of up to three years' imprisonment or a fine of up to ₹1 crore, or both.
- Advertising online money games is separately prohibited, carrying penalties of up to two years' imprisonment or a fine of up to ₹50 lakh.
- Facilitating financial transactions for such games — including by payment processors — is prohibited, with penalties of up to three years' imprisonment or a fine of up to ₹1 crore.
- Enforcement tools include CERT-In powers to block platforms, and provision for international cooperation (including Interpol) to reach offshore operators.
- A new Online Gaming Authority of India (OGAI), under the Ministry of Electronics and Information Technology, oversees classification, registration, and enforcement.
This is not a compliance question in the usual sense
Most of what this site covers is about registering and filing correctly for a legal activity. This is different: if your platform involves monetary stakes and Indian users, the current legal position is that offering it at all is prohibited. That is a materially different kind of question than "how do we file correctly," and deserves to be treated as such.
What remains legal
The 2025 Act takes a deliberately split approach — a blanket ban on one category, active promotion of two others. The distinction turns entirely on money.
E-sports
Competitive multi-player games forming part of organised events under predefined rules, recognised under the National Sports Governance Act, 2025. Registration or participation fees and performance-based prize money are permitted — this is structurally different from wagering on an uncertain outcome.
Watch: the exclusion depends on the absence of betting/wagering elements — structure matters more than branding.
Online social games
Games played for recreation or education without monetary stakes. The government has signalled active support for this category, including potential incentives for developers.
Watch: in-app purchases that don't involve wagering on an outcome generally remain a different category from "online money gaming" — but genuinely borderline monetisation models deserve specific review.
Standard OIDAR gaming (non-monetary)
Ordinary online games without real-money stakes remain within the standard OIDAR framework at 18% IGST for foreign providers serving Indian consumers — this was always the position for non-wagering games, and the 2025 Act doesn't disturb it.
Watch: this is a genuinely different, still-active compliance path from the online-money-gaming regime discussed in Section 3.
Professional tip
If your platform has multiple product lines — say, a free-to-play mode alongside a real-money mode — treat the classification question at the product level, not the company level. One line of business being prohibited doesn't necessarily mean your entire operation is affected, but it does mean the real-money line needs to stop.
The GST framework: Section 14A and its history
Before the 2025 ban existed, India had already built a specific, separate GST regime for online money gaming — distinct from standard OIDAR. That regime is what determines your retrospective exposure now.
Section 14A, IGST Act (inserted by the IGST Amendment Act, 2023, effective 1 October 2023)
A supplier of "online money gaming," as defined in Section 2(80B) of the CGST Act, located outside India, is liable to pay IGST on such supply to a person in India. This sits alongside — but separate from — the standard OIDAR registration and filing regime, with its own registration process and its own valuation rules.
Key differences from standard OIDAR
| Standard OIDAR | Online money gaming (Section 14A) | |
|---|---|---|
| Rate | 18% IGST | 28% IGST |
| Valuation base | Transaction value (what the customer pays for the service) | Total amount deposited/staked — not platform fee, not gross gaming revenue |
| Governing provision | Section 2(17) IGST Act | Section 14A IGST Act, explicitly excluded from the OIDAR definition |
| Legal status of the underlying activity | Legal digital service | Prohibited outright since 1 May 2026 (Section 1) |
Why the valuation base matters so much
Taxing the full deposited amount, rather than the platform's actual revenue, produces dramatically larger figures than most operators budgeted for — especially where winnings are redeployed into further games. A player's original stake can generate GST liability many times over as it churns through repeated play, even though the platform's own revenue (its fee or margin) is a small fraction of that total deposited value.
The Supreme Court ruling explained
On 27 May 2026, the Supreme Court resolved years of litigation in a single, decisive judgment — and it went entirely in the government's favour.
Directorate General of GST Intelligence v. Gameskraft Technologies Pvt. Ltd. (Civil Appeal Nos. 8241–8244 of 2026, decided 27 May 2026)
The Supreme Court set aside the Karnataka High Court's 2023 judgment that had quashed a show-cause notice against Gameskraft, and held that online gaming platforms, fantasy sports platforms, and casinos — where players stake money on an uncertain outcome — constitute "betting and gambling" for GST purposes, regardless of whether the underlying game involves skill or chance.
The core findings
- Operators are suppliers, not intermediaries. The Court held that gaming platforms exercise control over games, prize pools, and wallets, and are therefore the primary suppliers of "actionable claims" — not mere facilitators between players.
- 28% GST applies to the full stake value, not the platform's fee, commission, or gross gaming revenue — the valuation approach industry had specifically challenged.
- The 2023 amendments are retrospective. The Court characterised Rules 31B and 31C, and the related statutory changes, as clarificatory rather than creating a new levy — meaning they apply back through the disputed period, not only from October 2023 forward.
- Constitutional challenges were rejected. Arguments under Articles 14, 19(1)(g), 21, and 265 were all dismissed; the Court held that commercial hardship or an increased tax burden does not, by itself, make a tax measure unconstitutional.
- The Gameskraft show-cause notice was restored — a demand of approximately ₹21,000 crore, against a company whose entire revenue for the disputed period was estimated at roughly ₹4,650 crore.
Why this ruling reaches beyond the named parties
This was a consolidated judgment covering multiple connected appeals and transferred cases across the industry — not just Gameskraft. The Court's own order directs that pending show-cause notices and demands across the sector be decided in accordance with the valuation framework and findings in this judgment. If you had a matter that was paused pending this outcome, it is very likely active again.
Retrospective exposure — the real number
The gap between what operators expected to owe and what the confirmed methodology produces is the central commercial story here.
Illustrative example
On a ₹100 deposit taxed under a platform-fee model (roughly a ₹10 fee at 18%), GST would be approximately ₹1.50–₹1.80. Under the full-face-value model the Supreme Court has now confirmed, the same ₹100 deposit attracts ₹28 in GST — a 15 to 18 times difference. Because winnings are commonly redeployed into further games, the cumulative face value over a period of active play can exceed total original deposits many times over, which is part of how a single operator's demand can come to exceed its entire historical revenue.
One point of relief within the ruling: per the Explanation to Rules 31B/31C, redeployed winnings are not treated as a fresh deposit — tax attaches once at the point of original entry into the platform, not again on every subsequent stake funded from winnings already taxed. This limits the multiplication effect somewhat, though the underlying full-face-value methodology remains a fundamentally larger base than platform-fee taxation.
Professional tip
If you operated any real-money gaming product serving Indian users at any point since 2017 — even briefly, even as a minor product line — this is worth a specific, prompt assessment. The scale of exposure under this valuation methodology is frequently far larger than operators' own internal estimates, and the earlier this is understood, the more options remain available for managing it. Our penalty and exposure calculator is built around standard OIDAR rates and isn't calibrated for the 28%-on-full-value gaming methodology — a gaming-specific assessment needs to be done directly.
What to do right now
The right next step depends heavily on your current situation — these are genuinely different paths.
If you are currently offering real-money gaming to Indian users
Immediate priorities
- Get specific legal input on whether your product falls within the Act's definition of "online money gaming" — this is now an urgent legal question, not a background compliance item
- Understand the cessation and transition options available to you before deciding next steps
- Separately, and in parallel, assess your historical GST exposure for the pre-ban period under the confirmed 28%-on-full-value methodology
If you previously offered real-money gaming but have already exited the market
Immediate priorities
- Assess your retrospective GST exposure for the period you were active — this is now confirmed methodology, not a contingent risk
- Consider whether voluntary engagement with the department is preferable to waiting — see our GST Notice Response Guide for the general framework, though gaming-specific demands under this ruling warrant dedicated advice
If you offer e-sports, social gaming, or non-monetary games only
Immediate priorities
- Confirm your product genuinely sits outside the "online money gaming" definition — particularly if there's any prize money, wagering, or ambiguous monetisation model
- If confirmed outside the definition, standard OIDAR registration and 18% IGST compliance applies as normal — see our Complete Guide
A genuinely unusual situation deserves genuinely specific advice
This combination — a fast-moving outright ban layered on top of a landmark retrospective tax ruling — is not a standard compliance scenario, and generic guidance (including this guide) has real limits here. If either applies to you, a direct conversation is likely to be more useful than further reading.
Glossary
Online money gaming
As defined in Section 2(80B) of the CGST Act — games played after payment of a fee or stake, with an expectation of winning money, regardless of skill or chance. Now prohibited under the 2025 Act.
Actionable claim
A beneficial interest in movable property not in the claimant's possession, recognised by law as enforceable — the Supreme Court held that a stake in an online game constitutes this, making it "goods" for GST purposes.
Rule 31B / 31C, CGST Rules
The valuation rules requiring GST on the total amount deposited/staked (Rule 31B for online gaming, Rule 31C for casinos), rather than platform fee or gross gaming revenue.
OGAI
Online Gaming Authority of India — the regulator established under the 2025 Act, operating under MeitY, responsible for classification, registration, and enforcement.
E-sports
Organised, rules-based competitive gaming without wagering elements, recognised under the National Sports Governance Act, 2025 — explicitly distinct from "online money gaming" and not banned.
CA Parmod Bindal, FCA
Founder & Lead OIDAR Specialist, OIDARIndia™
A finance leader with over three decades in taxation, corporate governance, and cross-border advisory. Former Independent Director of Steel Authority of India (SAIL), a Maharatna PSU, and Independent Director of CSL Finance Limited, a listed NBFC. Read full profile →
About this guide & sources: This guide reflects the online gaming legal and tax position as at July 2026, including the Promotion and Regulation of Online Gaming Act, 2025 (in force from 1 May 2026) and the Supreme Court's judgment in Directorate General of GST Intelligence v. Gameskraft Technologies Pvt. Ltd. (Civil Appeal Nos. 8241–8244 of 2026, decided 27 May 2026). It draws on the IGST Act 2017 (including Section 14A, inserted 2023), the CGST Act 2017, and CGST Rules 31B/31C. It is provided for general information only and does not constitute legal advice — this is an area with both criminal and tax law dimensions, and genuinely warrants specific professional input rather than general guidance alone.
Need to understand exactly where you stand?
Whether you're currently operating, have already exited, or are assessing historical exposure — a focused conversation is the right next step here.