The Supreme Court on Friday granted a stay on GST (Goods and Services Tax) show-cause notices issued to several online gaming companies. This has provided temporary relief to the online gaming sector, which has come under increasing scrutiny by the tax authorities.

The verdict was delivered by a bench headed by Justice JB Pardiwala ahead of the Supreme Court's final hearing in the case on March 18. The decision is expected to ease some of the immediate financial pressures and regulatory uncertainties facing the online gaming industry.

The DGGI has sent 71 notices to gaming companies for alleged GST evasion of Rs 1.12 lakh crore during 2022-23 and the first seven months of 2023-24. Excluding interest and penalty, the total liability is expected to exceed Rs 2.3 lakh crore, including interest.

In July 2023, the 50th GST Council decided to levy 28% GST on the full face value of online gaming It will come into effect from October 1, 2023. This decision has resulted in multiple closures and numerous layoffs among startups operating in the gaming industry.

More than 100 Indian entrepreneurs, CEOs and industry bodies involved in the gaming sector have written to the Indian government urging it to reconsider its decision. Gaming companies such as Gamescraft, Dream11, Probo, and MPL have also received such notices.