New Delhi, May 27 -- In a major setback for online gaming firms, the Supreme Court 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 expected to have 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 petitioners - including Games24x7, Head Digital Works, Play Games24x7 Pvt. Ltd, Baazi Networks Pvt. Ltd...