Bridge Tournaments Not Taxable Under GST: Game of Skill, Not Gambling or Betting

In re Bridge Federation of India (GST AAR West Bengal)

Game of bridge, being a game of skill rather than chance, does not fall under the category of ‘betting’ or ‘gambling’ as per legal precedents and state laws. Therefore, participation money for bridge tournaments is not classified as ‘specified actionable claims’ under the GST Act. Therefore, such activities are not taxable under the GST Act

Introduction: The case “In re Bridge Federation of India” before the GST AAR (Authority for Advance Rulings), West Bengal, raised a critical question about the applicability of GST on physical or offline bridge games when played for money. The core issue was whether the contributions, participation money, or stakes bought by players in such tournaments would qualify as ‘specified actionable claims’ under section 2(102A) of the GST Act, 2017. This article explores the key observations and findings of the AAR on this matter.

Issue at Hand: The applicant, Bridge Federation of India, sought a ruling on whether the activities associated with organizing bridge tournaments, where players contribute participation fees or stakes, would fall within the scope of GST as ‘specified actionable claims’. The primary contention was that bridge, a game of skill, should not be taxed under GST as it does not constitute ‘betting’ or ‘gambling’, which are typically games of chance.

Observations & Findings of the Authority

1. Applicant’s Contentions: The applicant argued that under Section 7(2) of the GST Act, activities listed in Schedule III, such as ‘specified actionable claims’, are neither treated as a supply of goods nor services. The term ‘specified actionable claims’ was redefined by the GST Amendment Act, 2023, to specifically cover betting, casinos, gambling, horse racing, lottery, and online money gaming. Bridge, being a skill-based game, does not fit within these categories.
2. Game of Skill vs. Game of Chance: Bridge is recognized as a game of skill, where outcomes depend on players’ expertise, knowledge, and training rather than chance. The applicant cited judicial precedents, such as the Supreme Court’s ruling in the case of Rummy, affirming that games predominantly based on skill do not fall under ‘gambling’ or ‘betting’.
3. Determination of Tax Liability: Under Section 97(2) of the GST Act, the AAR is empowered to rule on issues including classification, taxability, and liability to pay tax on goods or services. The applicant classified their query under the determination of liability to pay tax, asserting that no GST is payable on contributions, winnings, or organization of physical bridge tournaments.
4. Definition of Specified Actionable Claims: As per Section 2(102A) of the GST Act, ‘specified actionable claims’ include betting, casinos, gambling, horse racing, lottery, and online money gaming. The applicant argued that bridge, being a physical game of skill, does not fall within this definition, and therefore, should not attract GST.
5. Court Precedents on Skill-Based Games: The Karnataka High Court, in a recent ruling involving Gameskraft Technologies, emphasized that games predominantly based on skill, even when played for monetary stakes, do not constitute gambling or betting under GST laws. This reinforced the stance that skill-based games remain outside the purview of GST.
6. Ruling: Based on the submissions and legal precedents, the AAR concluded that physical/offline bridge games played for money do not qualify as ‘specified actionable claims’. Therefore, such activities are not taxable under the GST Act, aligning with the understanding that skill-based games are distinct from games of chance, which are taxable under GST.

Conclusion

The GST AAR, West Bengal, ruled that the physical or offline game of bridge, even when played for stakes or prize money, is not taxable under GST. This ruling is a significant clarification for organizers of bridge tournaments, reaffirming that skill-based games do not fall within the ambit of ‘specified actionable claims’ subject to GST. This decision is grounded in a clear distinction between games of skill and games of chance, maintaining the legal stance that the former remains outside the taxable scope of GST.