Introduction: The Central Goods and Services Tax (Amendment) Act, 2023, enacted by the Parliament of India, brings forth substantial changes to the existing framework of the Central Goods and Services Tax Act, 2017. These amendments touch upon various aspects, including definitions, online gaming, specified actionable claims, and transitory provisions. This analysis dissects the key modifications and their potential implications.
Key Changes:
1. Online Gaming and Money Gaming Definitions: The Act introduces definitions for “online gaming” and “online money gaming.” Online gaming encompasses games offered on the internet or electronic networks and includes online money gaming. Online money gaming refers to gaming where players pay or deposit money or digital assets with the anticipation of winning money or digital assets, regardless of the outcome’s basis in skill or chance.
2. Specified Actionable Claims: The Act introduces the concept of “specified actionable claim.” It pertains to actionable claims connected to activities such as betting, casinos, gambling, horse racing, lottery, and online money gaming.
3. Taxation of Online Money Gaming: Those supplying online money gaming from outside India to individuals in India are now covered by the GST framework. This implies that such services will be subject to GST.
4. Expanded Definition of Virtual Digital Asset: The Act adopts the definition of “virtual digital asset” as specified in the Income-tax Act, 1961.
5. Amendment to Schedule III: Schedule III of the Central Goods and Services Tax Act has been modified. The reference to “lottery, betting, and gambling” has been replaced with “specified actionable claims.”
6. Transitory Provisions: The amendments made under this Act do not negate the provisions of any other existing laws that prohibit, restrict, or regulate activities such as betting, casinos, gambling, horse racing, lottery, or online gaming.
Implications: The Central Goods and Services Tax (Amendment) Act, 2023, brings about significant changes that reflect the evolving landscape of digital transactions and entertainment activities. The inclusion of definitions for online gaming and online money gaming signifies a proactive approach towards regulating this emerging sector. Additionally, the introduction of specified actionable claims underscores the government’s intent to comprehensively address various forms of speculative activities.
The Act’s provisions regarding taxation of online money gaming from outside India align with the government’s efforts to ensure a level playing field and generate revenue from digital services. Furthermore, the amendment to Schedule III ensures that the legal framework is adaptable to changing circumstances.
Conclusion: The Central Goods and Services Tax (Amendment) Act, 2023, ushers in a new era in taxation by addressing the dynamic landscape of digital transactions and entertainment. With definitions and provisions related to online gaming, specified actionable claims, and taxation of cross-border online money gaming, the Act demonstrates India’s commitment to adapting its tax structure to contemporary realities. As businesses and stakeholders navigate these changes, a nuanced understanding of the amended provisions is crucial for compliance and effective adaptation to the evolving tax landscape.
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MINISTRY OF LAW AND JUSTICE
(Legislative Department)
New Delhi, the 18th August, 2023/ Sravana 27, 1945 (Saka)
The following Act of Parliament received the assent of the President on the 18th August, 2023 and is hereby published for general information:—
THE CENTRAL GOODS AND SERVICES TAX (AMENDMENT) ACT, 2023
NO. 30 OF 2023
[18th August, 2023.]
An Act further to amend the Central Goods and Services Tax Act, 2017.
BE it enacted by Parliament in the Seventy-fourth Year of the Republic of India as follows:—
1. Short title and commencement.
(1) This Act may be called the Central Goods and Services Tax (Amendment) Act, 2023.
(2) It shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint:
Provided that different dates may be appointed for different provisions of this Act and any reference in any such provision to the commencement of this Act shall be construed as a reference to the coming into force of that provision.
2. Amendment of section 2.
In section 2 of the Central Goods and Services Tax Act, 2017 (hereinafter referred to 12 of 2017. as the principal Act),—
(a) after clause (80), the following clauses shall be inserted, namely:—
‘(80A) “online gaming” means offering of a game on the internet or an electronic network and includes online money gaming;
(80B) “online money gaming” means online gaming in which players pay or deposit money or money’s worth, including virtual digital assets, in the expectation of winning money or money’s worth, including virtual digital assets, in any event including game, scheme, competition or any other activity or process, whether or not its outcome or performance is based on skill, chance or both and whether the same is permissible or otherwise under any other law for the time being in force;’;
(b) after clause (102), the following clause shall be inserted, namely:—
‘(102A) “specified actionable claim” means the actionable claim involved in or by way of—
(i) betting;
(ii) casinos;
(iii) gambling;
(iv) horse racing;
(v) lottery; or
(vi) online money gaming;’;
(c) in clause (105), the following proviso shall be inserted at the end, namely:—
“Provided that a person who organises or arranges, directly or indirectly, supply of specified actionable claims, including a person who owns, operates or manages digital or electronic platform for such supply, shall be deemed to be a supplier of such actionable claims, whether such actionable claims are supplied by him or through him and whether consideration in money or money’s worth, including virtual digital assets, for supply of such actionable claims is paid or conveyed to him or through him or placed at his disposal in any manner, and all the provisions of this Act shall apply to such supplier of specified actionable claims, as if he is the supplier liable to pay the tax in relation to the supply of such actionable claims;”;
(d) after clause (117), the following clause shall be inserted, namely:—
‘(117A) “virtual digital asset” shall have the same meaning as assigned to it in clause (47A) of section 2 of the Income-tax Act, 1961;’.
3. Amendment of section 24.
In section 24 of the principal Act,—
(a) in clause (xi), the word “and” ocurring at the end, shall be omitted;
(b) after clause (xi), the following clause shall be inserted, namely:—
“(xia) every person supplying online money gaming from a place outside India to a person in India; and”.
4. Amendment of Schedule III.
In the principal Act, in Schedule III, in paragraph 6, for the words “lottery, betting and gambling” the words “specified actionable claims” shall be substituted.
5. Transitory provision.
The amendments made under this Act shall be without prejudice to provisions of Transitory any other law for the time being in force, providing for prohibiting, restricting or regulating provision. betting, casino, gambling, horse racing, lottery or online gaming.
DR. REETA VASISHTA,
Secretary to the Govt. of India.
