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Bet value doesn't qualify as income under I-T Act: Egaming firms to SC
Bet value doesn't qualify as income under I-T Act: Egaming firms to SC

Business Standard

timea day 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.

Online RMGs tell SC bet money is not taxable income under Income Tax Act
Online RMGs tell SC bet money is not taxable income under Income Tax Act

Business Standard

timea day 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.

Strike at Bangladesh's Busiest Port Paralyzes Trade, Threatens $222M Hit to Garment Industry
Strike at Bangladesh's Busiest Port Paralyzes Trade, Threatens $222M Hit to Garment Industry

Yahoo

time02-07-2025

  • Business
  • Yahoo

Strike at Bangladesh's Busiest Port Paralyzes Trade, Threatens $222M Hit to Garment Industry

A two-day strike at Bangladesh's biggest port shut down the movement of containers over the weekend, grinding shipping activity in the area to a standstill before the country's government issued a back-to-work order late Sunday. At Chattogram Port, customs officials walked off the job on Saturday and Sunday in solidarity with the federal government's National Board of Revenue (NBR), the parent organization of the Chattogram Customs House. More from Sourcing Journal Thailand-Cambodia Border Closures Snarl Regional Trade, Apparel Manufacturing Long Excluded in Climate Conversations, Fashion's Suppliers Create Own Seat at Table DHL Express Canada Reaches Deal With Union, Resumes Service NBR officials implemented a 'complete shutdown' program on Saturday, with the agency's employees all stopping work in tax, customs and VAT offices across the country. The agency has already held several labor disruptions, including hunger strikes and human chains, in protest of an ordinance on May 12 that would abolish the organization and establish two new entities in its place. The absence of customs clearance officers at Chattogram Port effectively stalled the hub's import-export processes, as there was no one to scan, inspect and clear the goods, preventing the port from releasing any cargo. Employees who were present did not perform any duties, a Chattogram Customs House told Bangladeshi publication The Business Standard. Cessation of customs activities spread to multiple land ports on the border of India, including the Akhaura Land Port and Bhomra Land Port, halting trade through Sunday. The Indian government had already restricted imports including readymade garments (RMGs) through these land gateways. In a statement shared with Reuters, the interim government of Prime Minister Muhammad Yunus said that import-export operations must continue uninterrupted to protect the economy, and that all NBR jobs were deemed essential services. During the two-day stretch, transportation of import and export containers to and from Chattogram Port had also been entirely suspended. This meant none of the 19 private inland container depots (ICDs) in Dhaka—which are typically used to alleviate congestion at Chattogram by adding more area for container handling—sent export-laden containers to the port. More than 14,000 containers piled up across the ICDs due to the NBR shutdown over the weekend, according to a report from The Business Standard. Under normal circumstances, the depots collectively hold roughly 10,000 to 11,000 containers, according to Mohammad Ruhul Amin Sikder, secretary general of the Bangladesh Inland Container Depot Association. 'In the past two days alone, around 3,000 to 3,500 containers were supposed to move from the ICDs to the port for shipment. But due to the shutdown, they couldn't be transported,' Sikder told The Business Standard, At least four vessels were unable to depart the port because they could not receive containers from the ICDs, the report said. On Monday, the Chattogram Port (also known as Chittagong Port) is scheduled to dispatch between 6,000 and 7,000 containers on five vessels. At the port, clearing and forwarding agents resumed work Monday morning. According to the Chattogram Port Authority, 10 container vessels are were berthed at the port's jetties as of Monday morning, while 19 more ships are waiting at the outer anchorage. Mahmud Hasan Khan Babu, the recently elected president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), said the suspended port operations would cost the country's RMG industry an estimated $222 million. 'The cost of recovery will be staggering—beyond comprehension—and many factories risk going bankrupt,' he told French news agency Agence France-Presse (AFP). Apparel is the backbone of Bangladesh's export economy, with the southeast Asian nation exporting $36.6 billion in RMGs throughout the first 11 months of the 2024-2025 fiscal year through May, according to the Export Promotion Bureau. Chattogram has recently been a hotbed for congestion, seeing significant delays due to the country's political unrest last year and other events like flooding and a software glitch that coincidentally caused the port's customs clearance systems to malfunction. Ahead of the strike, Kuehne + Nagel identified the Chattogram port as 'heavily disrupted' in a Thursday update. Average waiting times for ships to berth at the port totaled 4.89 days in the week prior to the update, the logistics giant said. At the time, the port had a yard occupancy rate of around 79 percent, with the company saying the yard is facing 'severe space constraints' due to the extended Eid al-Adha holiday in early June. The lack of space has more heavily affected imports slowing vessel operations at two of Chattogram Port's terminals: New Mooring Container Terminal (NCT) and Chittagong Container Terminal (CCT). Export loads are also limited because of 'time consuming' cargo unloading operations, worsened by CPA equipment issues, according to Kuehne + Nagel. Due to a rail shortage, dwell times for Dhaka ICD-bound imports are seven to 10 days for 20-foot containers and two to three days for 40-foot containers.

Madras High Court upholds Tamil Nadu's real-money gaming regulations
Madras High Court upholds Tamil Nadu's real-money gaming regulations

Business Standard

time03-06-2025

  • Business
  • Business Standard

Madras High Court upholds Tamil Nadu's real-money gaming regulations

The Madras High Court on Tuesday upheld Tamil Nadu's regulations that impose time limits on real-money games (RMGs) such as rummy and poker. The state's regulations prohibit real-money gaming platforms from operating between midnight and 5 am. A Bench of Justice S M Subramaniam and Justice K Rajasekar dismissed the writ petitions filed by Esport Players Welfare Association and gaming companies such as WinZO, Head Digital Works, Junglee Games, and Games24x7. The High Court noted regulations framed by the Tamil Nadu Online Gaming Authority were not paternalistic but were intended to ensure the physical, mental, and financial well-being of the state's people. It said the petitioners' contention that no blanket hours were imposed on consuming content on OTT (over the top) platforms, unlike real-money games, was not sustainable because there were no monetary stakes involved. 'It is only in online RMGs where there are stakes involved (that) the players get attracted by the prospect of rewards, which could lead to addictive behaviour and, more often than ever, (the players) tend to get lost in the pleasure of the game,' the court observed. The court said there was no strong reason to dilute the need for Aadhaar-based authentication. This is required to verify the age of the participants, given that the law prohibits minors from playing real-money games. 'The scope for manipulation or deceit is less in Aadhaar verification (than in) other ID proofs,' it noted. It added the state was authorised to pass legislation to govern matters affecting the public health of its citizens, citing that games such as rummy and poker had created public-health risks in Tamil Nadu. An industry participant said: 'From the industry's perspective, the state's powers are restricted to betting and gambling. RMGs in India are a game of skill and not chance. By consequence, the powers to regulate online games of skill rest only with the Centre.' The person added that the ban hours prohibited professionals from playing in international tournaments. 'Players cannot play international tournaments held during the hours when the blanket ban is imposed (midnight to 5 am). They are missing out. The right to livelihood is in question,' the person added.

Right to trade cannot impede on right to life: Madras HC upholds Tamil Nadu's real money gaming regulations
Right to trade cannot impede on right to life: Madras HC upholds Tamil Nadu's real money gaming regulations

New Indian Express

time03-06-2025

  • Business
  • New Indian Express

Right to trade cannot impede on right to life: Madras HC upholds Tamil Nadu's real money gaming regulations

The bench held that the right to conduct trade enshrined in Article 19(1)(g), being a vital fundamental right, cannot be used to deter the people's right to life under Article 21. The petitions were filed by online gaming platforms including Play Games 24x7 Private Limited, Head Digital Works Private Limited, Junglee Games India Private Limited. These companies had challenged the Tamil Nadu Online Gaming Activity (Real Money Games) Regulations, 2025. The main contentions were against the bar on under 18 minors from playing the games, mandatory know your client (KYC) registration with Aadhaar number, playing RMGs during blank hours- from 12 am to 5 am and the compulsory pop-up caution alerts for every thirty minutes after the initial one hour and setting of time bound monetary limits. They also stated the state's act and regulations were repugnant with the Information Technology Act of the Centre. Pointing to the reports on the negative effects of the online RMGs on the physical, mental and financial aspects of a player who in essence is not playing with another human but a pre-programmed computer, the bench held that it would be only fair to ensure the right to life under Article 21 of the player is protected which also encompasses his right to health. It negated the contention of the online gaming firms that the restrictions of blank hours and age limit are paternalistic in nature.

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