The CBIC issued various notifications on 29.09.2023, to notified October 1st, 2023 as the date for implementation of the amended GST law provisions for taxing e-gaming, casinos and horse racing. According to the changes to the Central GST Act, these supplies will henceforth be treated as ‘actionable claims' similar to lottery, betting and gambling and subject to 28 per cent Goods and Services Tax (GST) on full face value of bets.
The amendments to Integrated GST (IGST) Act makes it mandatory for offshore online gaming platforms to take registration in India and pay taxes in accordance with domestic law.
In the GST Council meetings in July and August, comprising finance ministers of Centre and states, had approved amendments to the law to include online gaming, casinos and horse racing as taxable actionable claims, and clarified that such supplies would attract 28 per cent tax on full bet value. Parliament last month passed amendments to the Central GST and Integrated GST laws to give effect to the Council's decision.
Also, the government has also proposed for a review of the new GST provisions after implementation which is likely to be carried out after six months from the date of notification i.e. April, 2024.
The Notifications are as under:
1. Notified 1st October, 2023 for applicability of the CGST (Amendment) Act, 2023
The Government has notified the Central Goods and Services Tax (Amendment) Act, 2023 on 18th August, 2023, for implementation of new tax on online gaming, casinos and horse racing.
Now, CBIC vide Notification No. 48/2023-Central Tax has appointed 1st October, 2023, for applicability of the provisions of Amendment Act, 2023.
The Notification can be accessed at https://taxo.online/wp-content/uploads/2023/09/48_ENG.pdf
2. Notified 1st October, 2023 for applicability of the IGST (Amendment) Act, 2023
The Government has notified the Integrated Goods and Services Tax (Amendment) Act, 2023 on 18th August, 2023, for implementation of new tax on online gaming, casinos and horse racing.
Now, CBIC vide Notification No. 02/2023-Integrated Tax has appointed 1st October, 2023, for applicability of the provisions of Amendment Act, 2023.
The Notification can be accessed at https://taxo.online/wp-content/uploads/2023/09/02-2023.pdf
3. Notified Supply of online money gaming and online gaming, the methodology of valuation to be determined u/s 15(5) of the CGST Act:
The CBIC vide Notification No. 49/2023-Central Tax, has notified the supply of online money gaming, supply of online gaming other than online money gaming and supply of actionable claims in casinos under section 15(5) of CGST Act, 2017. The Notification shall be effective w.e.f. 01st October, 2023.
Section 15 of the CGST Act, 2017 provides the methodology of the taxable value of supply of goods and/ or services for levy of GST. Accordingly, the taxable value of goods or services or both shall be the transaction value, which is the price actually paid or payable for the said supply of goods or services or both where the supplier and the recipient of the supply are not related and the price is the sole consideration for the supply. However, Section 15(5) of the CGST Act provides powers to the Government to determine the value on notified supplies on recommendation of the GST Council.
The Notification can be accessed at https://taxo.online/wp-content/uploads/2023/09/49_ENG.pdf
4. Amendment in the CGST Rules, 2017 w.e.f. 01st October, 2023
The CBIC vide Notification No. 51/2023-Central Tax, has amended the Central Goods and Services Tax Rules, 2017, to implement the changes relating to online gaming including online money gaming and casinos. The Notification shall be effective w.e.f. 01st October, 2023.
The Notification can be accessed at https://taxo.online/wp-content/uploads/2023/09/51_ENG.pdf
5. IGST to be levied on importation of online money gaming
The CBIC vide Notification No. 03/2023-Integrated Tax, notifies the supply of online money gaming as the goods on import of which the proviso to sub-section (1) of section 5 of the said Act shall not apply, but on which integrated tax shall be levied and collected under sub-section (1) of section 5 of the said Act. The Notification shall be effective w.e.f. 01st October, 2023.
The Notification can be accessed at https://taxo.online/wp-content/uploads/2023/09/03-2023.pdf
6. Simplified registration Scheme for overseas supplier of online money gaming
The CBIC vide Notification No. 04/2023-Integrated Tax, notifies the Principal Commissioner of Central Tax, Bengaluru West and all the officers subordinate to him as the officers empowered to grant registration in case of supply of online money gaming provided or agreed to be provided by a person located in non-taxable territory and received by a person in India. The Notification shall be effective w.e.f. 01st October, 2023.
The Amendments to IGST Act makes it mandatory for the off-shore online gaming platforms to take registration in India and pay taxes in accordance with the domestic law.
The Notification can be accessed at https://taxo.online/wp-content/uploads/2023/09/04-2023.pdf
