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

The verdict was delivered by a bench headed by Justice J B 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 faced by the online gaming industry.

The DGGI had issued 71 notices to gaming companies for allegedly evading GST worth Rs 1.12 lakh crore during 2022-23 and the first seven months of 2023-24. The total liability, excluding interest and penalty, 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, effective from October 1, 2023. This decision led to multiple closures and several layoffs in startups operating in the gaming industry.

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