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Business Standard
14 hours ago
- Business
- Business Standard
Bet value doesn't qualify as income under I-T Act: Egaming firms to SC
The bet money placed by users in online real-money games (RMG) is neither accrued nor received by casinos and, therefore, should not be considered as income under the Income Tax Act, RMG intermediaries told the Supreme Court on Tuesday. As per the Income Tax Act, a consideration is defined by law as any sum or value that is either received or recoverable from a user or a client in return for a service that has either been provided or will be provided. Since online RMGs do not accrue or receive the monies deposited by users for themselves, it cannot be considered taxable income, the counsel for the companies told the Court. He further explained that when people play against the casinos, they settle with the winners and losers and then take whatever is left as surplus. "We are not valuing the bet but the right to win. It's a different concept from bet far as the face value of the bet is concerned, it belongs to the winner," he said. The court will continue hearing online RMGs' arguments until Friday. In the last hearing, the companies had argued that the GST provisions before October 2023 were inadequate to impose a 28 per cent tax on online gaming operators in the manner attempted by the authorities. The government's reliance on Rule 31A of the GST Rules (value of supply in case of lottery, betting, gambling, and horse racing), introduced in 2018, was challenged because it lacked statutory authority under the Central GST (CGST) Act, the companies had said. On Tuesday, online RMGs also contended that attempts to tax actionable claims like betting and gambling as 'goods' by amending the Goods Rate Notification were flawed. Until October 1, 2023, there was no entry for actionable claims in the Customs Tariff Schedule, making their classification as goods unsustainable under GST. The petitioners (online gaming companies) explained to the court the distinction between platform fees, on which GST is already paid, and prize pool contributions made by players, which are held in trust and returned to winners. They claimed that prize pool contributions do not constitute consideration and thus cannot be taxed under GST. In the case of online games, they argued that these games are played against each player, with the online gaming operator merely providing platform services, and that the platform operator, as the supplier of platform services, has discharged GST during the relevant period at the specified rate. The division bench of Justices J B Pardiwala and R Mahadevan is hearing the case, which deals with the absence of clear taxing provisions to enforce tax collection before the October 2023 overhaul. The case, with an estimated financial impact of Rs 2.5 trillion, is one of the biggest tax battles in India's history. The matter will continue on Wednesday.
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Business Standard
15 hours ago
- Business
- Business Standard
Online RMGs tell SC bet money is not taxable income under Income Tax Act
The bet money placed by users in online real-money games (RMG) is neither accrued nor received by casinos and, therefore, should not be considered as income under the Income Tax Act, RMG intermediaries told the Supreme Court on Tuesday. As per the Income Tax Act, a consideration is defined by law as any sum or value that is either received or recoverable from a user or a client in return for a service that has either been provided or will be provided. Since online RMGs do not accrue or receive the monies deposited by users for themselves, it cannot be considered taxable income, the counsel for the companies told the Court. He further explained that when people play against the casinos, they settle with the winners and losers and then take whatever is left as surplus. "We are not valuing the bet but the right to win. It's a different concept from bet far as the face value of the bet is concerned, it belongs to the winner," he said. The court will continue hearing online RMGs' arguments until Friday. In the last hearing, the companies had argued that the GST provisions before October 2023 were inadequate to impose a 28 per cent tax on online gaming operators in the manner attempted by the authorities. The government's reliance on Rule 31A of the GST Rules (value of supply in case of lottery, betting, gambling, and horse racing), introduced in 2018, was challenged because it lacked statutory authority under the Central GST (CGST) Act, the companies had said. On Tuesday, online RMGs also contended that attempts to tax actionable claims like betting and gambling as 'goods' by amending the Goods Rate Notification were flawed. Until October 1, 2023, there was no entry for actionable claims in the Customs Tariff Schedule, making their classification as goods unsustainable under GST. The petitioners (online gaming companies) explained to the court the distinction between platform fees, on which GST is already paid, and prize pool contributions made by players, which are held in trust and returned to winners. They claimed that prize pool contributions do not constitute consideration and thus cannot be taxed under GST. In the case of online games, they argued that these games are played against each player, with the online gaming operator merely providing platform services, and that the platform operator, as the supplier of platform services, has discharged GST during the relevant period at the specified rate. The division bench of Justices J B Pardiwala and R Mahadevan is hearing the case, which deals with the absence of clear taxing provisions to enforce tax collection before the October 2023 overhaul. The case, with an estimated financial impact of Rs 2.5 trillion, is one of the biggest tax battles in India's history. The matter will continue on Wednesday.
Mint
6 days ago
- Business
- Mint
Simplify GST: It's time for a single all-India identification mandate
The goods and services tax (GST), which recently completed eight years in India, was originally envisioned as a 'good and simple tax." However, over time, it has become increasingly complex. While a national GST would have been an ideal value added tax (VAT) system, the imperatives of a federal structure led to a compromise, resulting in a dual GST system comprising Central GST (CGST), State GST (SGST) and Integrated GST (IGST). Under this system, the Centre and state governments have concurrent authority to tax the consumption of goods and services based on the principle of incidence at destination, in contrast with the previous indirect tax regime, which followed an origin-based taxation approach. Also Read: Ajit Ranade: A progressive GST is easier to promise than achieve While the uniformity of SGST laws across states has reduced compliance complexities compared to the VAT regime, challenges remain. Businesses with a pan-India presence still need multiple SGST registrations and must manage compliance separately for each state, including GST payments and return filings. This fragmented approach retains some of the administrative burdens of the VAT era despite the procedural standardization. Compliance burden: The Indian GST framework, often referred to as a 'one nation, one tax' system, has unified tax rates across states and Union territories (UTs), eliminating other taxes on goods and services under its scope. While this standardization simplifies the tax structure, businesses that operate across multiple states or UTs, as mentioned above, are required to obtain separate GST Identification Numbers (GSTINs) for each state or UT and file individual GST returns by using separate usernames and passwords for each jurisdiction. This has led to complex compliance procedures and a notable increase in related costs, especially due to the extensive reconciliations needed on a monthly and annual basis. Also Read: How India's GST revenues can sustain their incline On another front, the central government is working to address inter-governmental settlement issues related to IGST. Between April and July 2024, excess IGST allocations amounting to ₹10,659 crore were made to certain states. To resolve this, an internal committee has been set up that is chaired by the additional secretary of revenue at the Centre and comprises officials from both state and central governments. This panel aims to review the IGST mechanism and develop strategies for recovering these excess transfers. These developments highlight the operational complexities and financial implications associated with the implementation of GST, despite its overarching goal of creating a unified tax system. E-invoicing: The GST compliance process is largely digitized, with e-invoicing now mandatory for all business-to-business (B2B) transactions for taxpayers with an annual turnover exceeding ₹5 crore. There are plans to extend this requirement to all taxpayers and eventually to business-to-consumer (B2C) transactions. Once fully implemented, e-way bills should be eliminated. This move would significantly reduce the compliance burden for taxpayers and streamline operations, leading to faster turnaround times for transport vehicles and improved efficiency in the supply chain. Also Read: Mint Quick Edit | India's GST peak is reassuring PAN 2.0: The Union government recently unveiled plans to introduce PAN 2.0, an upgraded version of the longstanding Permanent Account Number system used by the Income Tax department as a unique taxpayer identifier. PAN 2.0 aims to modernize and streamline operations for businesses and citizens alike. The revamped system will leverage advanced technology to enhance efficiency, integrate PAN as a single identifier for specified business activities and introduce a unified portal for all PAN-related services. This presents an ideal opportunity to design a single GSTIN for taxpayers operating across India. Under this system, tax allocation can occur seamlessly at the back-end, using place-of-supply rules and data captured through e-invoicing. Such a framework would eliminate the need for an integrated GST administration across levels of governments under the GST Council. Since transaction-wise granular data would be available, GST revenues can be allocated equally between the Centre and states—and, on a destination-based principle, between states. Also Read: Simplify India's GST regime: The case for it is clear and it's time to act In this context, lessons can be learnt from the experience of other federal countries such as the United Arab Emirates (UAE), where a single VAT registration number is used for operations across all its constituent emirates. In the UAE, a unified VAT applies to intra-emirate, inter-emirate and import transactions without the need for separate registration in each emirate. India's next GST Council meeting should discuss this crucial aspect as well, since taking such simplification steps for GST compliance could significantly ease operational challenges for businesses and reduce administrative overheads, thus fostering economic growth by creating a more efficient and business-friendly tax regime. These are the authors' personal views. The authors are associated with the Pune International Centre (PIC), a think tank.
Hans India
12-07-2025
- Business
- Hans India
CM wants state to be role model in GST collections
Vijayawada: Chief Minister N Chandrababu Naidu on Friday stressed that Andhra Pradesh should become a role model for the country in GST collections. He instructed officials to take strict measures to prevent tax evasion. A coordination meeting of Central and state GST officials was held at the Chief Minister's camp office, chaired by him. State finance special chief secretary Piyush Kumar, state taxes chief commissioner Babu A, and GST officials from both Centre and state attended the meeting. Speaking on the occasion, the Chief Minister stressed the use of technologies like data analytics to prevent tax evasion. He said that efficient tax collection would contribute to national wealth, which should be used for public welfare and development. Underlining the need for proper coordination between Central and state GST officials for the better realization of Goods & Services Tax (GST) in the state, the Chief Minister added that there should be a competitive action plan to match neighboring states in GST collections. He said tax data should be analysed using data analytics, and even factors like electricity consumption should be considered to detect evasion. The Chief Minister stressed that there should be no errors in GST registrations. The state government will soon build a data lake combining all departmental information in one place, which will also be shared with Central GST officials, he added. He explained that if the state receives its rightful share of resources, there will be no need to approach the Centre for every small issue. He directed officials to work with organisations like Confederation of Indian Industry (CII) to raise awareness and prevent tax evasion, and to act strictly if evasion continues. Officials informed the Chief Minister that GST collections in the state increased by 3.4 per cent. They said that the upcoming GST tribunals in Visakhapatnam and Vijayawada will help resolve tax disputes. Central GST officials requested the Chief Minister to allot five acres of land in Amaravati for constructing the Central GST Zonal Office and residential quarters.
Time of India
02-07-2025
- Business
- Time of India
Voltas gets Rs 265 crore show cause notice from GST authorities
Voltas announced on Wednesday that it has received a show cause notice from the Central GST authorities demanding an explanation for an alleged shortfall in tax payments totaling Rs 265.25 crore. According to an exchange filing by the Tata-owned company, the notice pertains to the financial years 2018–19 to 2020–21 and relates to Universal Comfort Products Limited , which was merged into Voltas during the 2020–21 financial year. "We would like to inform that a Show Cause Notice from the Office of the Principal Commissioner, Central GST Commissionerate, Dehradun, under the Central Goods and Services Tax Act, 2017 read with the Uttarakhand Goods and Services Tax Act, 2017 and the Integrated Goods and Service Tax Act, 2017 has been received alleging short payment of GST for the financial years 2018-19 to 2020-21 by Universal Comfort Products Limited (which got merged with the Company during the financial year 2020-21)," the filing read.
