The CBIC vide Notification No. 45/2023-Central Tax dated 06.09.2023, to notified amendments to GST law in relation to the valuation methodology to be adopted by online gaming companies and casinos for calculating tax. The valuation methodology are based on recommendations given by GST Council in its meeting on July 18 and August 2. It may be noted that the rate of GST will be 28 per cent on full face value.
The Notification notifies as under:
a) Insertion of Rule 31B for Valuation of supply in case of online gaming including online money gaming:
The value of the supply of online gaming, including supply of actionable claims involved in online money gaming, shall be the “total amount paid or payable to or deposited with the supplier by way of money or money’s worth, including virtual digital assets, by or on behalf of the player.”
Further, it has been provided that any amount returned or refunded by the supplier to the player for any reason, including the player not using the amount paid or deposited with the supplier for participating in any event, shall not be deductible from the value of the supply of online money gaming.
The notification has also made it clear that deployment of winning amount for further play will not be considered part of value of supply for both online gaming and casinos. “Any amount received by the player by winning any event, including game, scheme, competition or any other activity or process, which is used for playing by the said player in a further event without withdrawing, shall not be considered as the amount paid to or deposited with the supplier by or on behalf of the said player,”
b) Insertion of Rule 31C for Valuation of supply of actionable claims in case of casino:
The value of the supply of actionable claims in a casino shall be the total amount paid or payable by the player for buying tokens, chips, coins or tickets. The same will be applicable for the amount paid to participate in any event, including game, scheme, competition or any other activity or process, in the casino, in cases where the token, chips, coins or tickets are not required.
It has been provided that any amount returned or refunded by the casino to the player on return of tokens, coins, chips, or tickets, shall not be deductible from the value of the supply of actionable claims in the casino.
The notification has also made it clear that deployment of winning amount for further play will not be considered part of value of supply for both online gaming and casinos. “Any amount received by the player by winning any event, including game, scheme, competition or any other activity or process, which is used for playing by the said player in a further event without withdrawing, shall not be considered as the amount paid to or deposited with the supplier by or on behalf of the said player,”
The Notification can be accessed at https://taxo.online/wp-content/uploads/2023/09/gst-ct-45-2023.pdf
