New Delhi, May 27 -- In a major setback for online gaming firms, the Supreme Court of India on Wednesday upheld the constitutional validity of the 28% goods and services tax (GST) levy on online gaming and rejected challenges against retrospective tax demands worth nearly Rs.1.5 trillion. The landmark ruling is seen having far-reaching implications for the sector.

The verdict, delivered by a bench of Justice J.B. Pardiwala and Justice R. Mahadevan, dismissed a batch of petitions filed by online gaming companies, casinos, turf clubs and industry bodies challenging GST notices and the legal framework governing taxation of online gaming.

The court upheld the validity of the retrospective tax demands raised by authorities and ruled in favou...