Introduction: The Integrated Goods and Services Tax (Amendment) Act, 2023, recently passed by the Indian Parliament, brings forth substantial changes to the existing Integrated Goods and Services Tax Act, 2017. These changes touch upon various aspects, including definitions, place of supply, and a special provision for online money gaming suppliers. This analysis delves into the key modifications and their potential implications.
1. Definition of Online Gaming: The Act amends the definition of online gaming in the Integrated Goods and Services Tax Act, 2017. Online gaming is now defined as excluding online money gaming as defined in clause (80B) of section 2 of the Central Goods and Services Tax Act, 2017.
2. Place of Supply Amendment: The Act introduces a new clause in section 5 of the principal Act. This clause empowers the government to notify specific goods for which integrated tax on goods will not be applicable, as recommended by the Council.
3. Change in Place of Supply Rules: Section 10 of the principal Act is amended to incorporate a new clause (ca). This clause pertains to the place of supply for goods supplied to a non-registered person. The place of supply is determined by the address recorded in the invoice issued for the supply. The recording of the name of the state in the invoice is deemed to be the recording of the address of the said person.
4. Introduction of Section 14A: A new section, 14A, is inserted after section 14 of the principal Act. This section outlines a special provision for specified actionable claims supplied by a person located outside the taxable territory. It stipulates that a supplier of online money gaming not situated in the taxable territory is liable to pay integrated tax on supplies made to persons within the taxable territory. The section also outlines the registration requirements and consequences of non-compliance.
Implications: The Integrated Goods and Services Tax (Amendment) Act, 2023, reflects the Indian government’s commitment to adapting taxation laws to accommodate emerging sectors and address evolving digital transaction dynamics. The clarification of the place of supply for non-registered individuals provides a structured approach to determining tax liabilities. Additionally, the introduction of section 14A demonstrates an effort to regulate cross-border online money gaming activities and ensure their proper taxation.
Conclusion: The Integrated Goods and Services Tax (Amendment) Act, 2023, introduces pivotal changes that reflect India’s determination to regulate and tax digital transactions, cross-border activities, and emerging sectors. These amendments align with the evolving needs of the economy and digital landscape. As businesses and stakeholders navigate these changes, a comprehensive understanding of the amended provisions is essential for compliance and effective adaptation to the evolving tax regime.
MINISTRY OF LAW AND JUSTICE
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 INTEGRATED GOODS AND SERVICES TAX (AMENDMENT) ACT, 2023
NO. 31 OF 2023
[18th August, 2023.]
An Act further to amend the Integrated 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 Integrated 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.
2. Amendment of section 2.
In section 2 of the Integrated Goods and Services Tax Act, 2017 (hereinafter referred to as the principal Act), in clause (17), for sub-clause (vii), the following sub-clause shall be substituted, namely:—
“(vii) online gaming, excluding the online money gaming as defined in clause (80B) of section 2 of the Central Goods and Services Tax Act, 2017;”.
3. Amendment of section 5.
In section 5 of the principal Act, in sub-section (1), in the proviso, after the words “integrated tax on goods”, the words “other than the goods as may be notified by the Government on the recommendations of the Council” shall be inserted.
4. Amendment of section 10.
In section 10 of the principal Act, in sub-section (1), after clause (c), the following clause shall be inserted, namely:—
“(ca) where the supply of goods is made to a person other than a registered person, the place of supply shall, notwithstanding anything contrary contained in clause (a) or clause (c), be the location as per the address of the said person recorded in the invoice issued in respect of the said supply and the location of the supplier where the address of the said person is not recorded in the invoice.
Explanation.—For the purposes of this clause, recording of the name of the State of the said person in the invoice shall be deemed to be the recording of the address of the said person;”.
5. Insertion of new section 14A.
After section 14 of the principal Act, the following section shall be inserted, namely:—
Special provision for specified actionable claims supplied by a person located outside taxable territory.
“14A. (1) A supplier of online money gaming as defined in clause (80B) of section 2 of the Central Goods and Services Tax Act, 2017, not located in the taxable territory, shall in respect of the supply of online money gaming by him to a person in the taxable territory, be liable to pay integrated tax on such supply.
(2) For the purposes of complying with provisions of sub-section (1), the supplier of online money gaming shall obtain a single registration under the Simplified Registration Scheme referred to in sub-section (2) of section 14 of this Act:
Provided that any person located in the taxable territory representing such supplier for any purpose in the taxable territory shall get registered and pay the integrated tax on behalf of the supplier:
Provided further that if such supplier does not have a physical presence or does not have a representative for any purpose in the taxable territory, he shall appoint a person in the taxable territory for the purpose of paying integrated tax and such person shall be liable for payment of such tax.
(3) In case of failure to comply with provisions of sub-section (1) or sub-section (2) by the supplier of the online money gaming or a person appointed by such supplier or both, notwithstanding anything contained in section 69A of the Information Technology Act, 2000, any information generated, transmitted, received or hosted in any computer resource used for supply of online money gaming by such supplier shall be liable to be blocked for access by the public in such manner as specified in the said Act.”.
DR. REETA VASISHTA,
Secretary to the Govt. of India.