TaxTMI 
TaxTMI 
2024 (8) TMI 1438
X X X X Extracts X X X X
X X X X Extracts X X X X
....vance Ruling Regulations, 2018. 1.1 At the outset, we would like to make it clear that the provisions of the Central Goods and Services Tax Act, 2017 (the CGST Act, for short) and the West Bengal Goods and Services Tax Act, 2017 (the WBGST Act, for short) have the same provisions in like matter except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean reference to the corresponding similar provisions in the WBGST Act. Further to the earlier, henceforth for the purposes of these proceedings, the expression "GST Act" would mean the CGST Act and the WBGST Act both. 1.2 The applicant is stated to be an apex body for game of contract bridge (hereinafter referred to as "bridge") in India. The applicant works for the developmental and conduct of the bridge in line with guidelines issued by the World Bridge Federation (hereinafter referred as "WBF") for selection of national teams for various events at Asian and zonal level. The applicant states that it along with its designated associates is going to organize an offline/physical tournament of bridge played for money in the state of West ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t who fulfills criteria mentioned in clause (a) of section 95 of the GST ACT teamed with clause (c) of section 95 of the GST ACT; • Application is made for a determination of questions specified under sub section (2) of section 97 of the GST Act. 1.7.1 A conjoint reading of these sections reveals that two conditions need to be fulfilled for earning eligibility the status of an applicant under GST Act. I. The applicant is a person either registered under the Act or desirous to get registered under this act and it either engaged in a business of supply of goods or services or desirous of engaging in such business in the state. II. The applicant seeking advance ruling to a question in relation to the supply of goods or services or both whether already being undertaken in the state or proposed to be undertaken in such state by such applicant. 1.7.2 The applicant has placed his reliance on an order of the Maharashtra Authority of Advance Ruling, in the matter of Ultra Tech Cement Ltd where the term "Applicant" was clarified by the Ld. Authority as under: "A perusal of the above clarifies that scope of the term "Applicant" as defined under su....
X X X X Extracts X X X X
X X X X Extracts X X X X
..... Sub-section (3) of section 25 of the GST Act on the other hand makes provisions for voluntary registration. 1.10 Every person including a person desirous for voluntary registration other than the persons belonging to certain specific categories is required to make an application in FORM GST REG-01. An applicant while filing for application for registration has to mandatorily declare the address of principal place of business in the application. Such address must be within the state in respect of which the application has been made. The only exception has been prescribed in sub-rule (1A) of rule 12 of the Central Goods and Services Tax Rules, 2017 and the West Bengal Goods and Services Tax Rules, 2017 related to grant of registration to persons required to deduct tax at source or to collect tax at source in accordance with the provisions of section 51 or section 52, as the case may be. 1.11 From a conjoint reading of the aforesaid provisions of the Act and rules, it transpires that unless a person doesn't have any place of business in a particular state, it cannot be said that the person is desirous of obtaining registration in that state. Desirous of carrying out business a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Information about the tournament being organized, is published on the website of the Organizer and also in local newspapers well in advance • The players/ participants interested in taking part in the tournament will enroll themselves with the Organizers of the tournament. • Players are required to participate in teams. • Matches during the tournaments may involve the players investing money or money's worth in each game. • Tournament organizers do not lien over this money or money's worth contributed by players. Contribution of money deposited in a common pool and an independent person sponsors prize money. • The winning teams would advance to the next rounds gradually till the final winning team is declared. • For selected recognized tournaments, players also accrue points based on their performance, which goes towards their selection in the national team to represent the country. 2.4 The applicant first discusses factual position of law prior to GST Amendment Act 30 of 2023 as this amendment raises certain queries in respect of their activities within the definition of supply under section 7 of the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ok-maker or by means of a totalizator as defined in Section 14 of the Bengal Amusement Tax Act, 1922, but does not include a lottery or games of cards like Bridge, Poker, Rummy or Nap" 2.7 Section 12 of West Bengal Gambling and Prize Competitions Act, 1957 excludes game of skill from the ambit of gambling and betting. "Nothing in this chapter shall apply to any game of mere skill wherever played: Provided that when such game is played in a public market, fair, carnival or street or in any place where the public may have access, a permit from the Commissioner of Police, in Calcutta or the District Magistrate or the Sub-divisional Magistrate elsewhere, shall be obtained first, by the organizer thereof, or payment of such fee as may be prescribed. Any person contravening the provisions of this section shall be punishable." The applicant also articulates the fact that betting and gambling are always used as a phrase in any legal framework in India and is inextricably linked with each other. 2.8 The applicant places its reliance on the following judgments of the Hon'ble Supreme Court where betting and gambling are specifically excluded for games like Bridge which playe....
X X X X Extracts X X X X
X X X X Extracts X X X X
....pply of goods nor service in GST. The activities of the applicant of organizing physical/offline tournament remained outside the domain of GST. After the amendment of entry no 6 of Schedule III, it is crucial of the applicant to throw light on other features under "specified actionable claims" to sustain their position in respect of bridge. 2.10 The applicant contends that a plain and simple reading of sub-section 102A of section 2 of the GST Act, 2017, which defines 'specified actionable claim' shows that offline playing games like bridge would not be fall under this category of 'online gaming'. 2.11 The applicant draws attention to other similar changes inserted vide Notification No. 51/2023 Central Tax dated 29.09.2023 in rule 31B and 31C where clarifications have been cited for value of supply in case of online gaming including online money gaming and value of supply of actionable claims in case of casino. The applicant thus contends that notification itself gives no room to the application of physical /offline game of bridge played for money. As evident from the above, even under the amended provisions of the GST Act, organizing tournament or games for physical/offline g....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ery and online money gaming. • Further, 'betting' and 'gambling' have a well-understood legal definition, which has been interpreted and defined by Courts to apply only to "Games of Chance". • Bridge is a card game which is a game of skill. The result of the game is influenced by the expertise, knowledge, and training of the player and therefore it cannot be regarded as a game chance. • Therefore, when bridge is played for money in a physical/offline mode, it does not get covered by the definition of 'specified actionable claim' and would continue to remain outside the periphery of GST. 3.2 As per sub-section (2) of section 97 of the GST Act, the question on which the advance ruling is sought under this Act, shall be in respect of, - (a) classification of any goods or services or both; (b) applicability of a notification issued under the provisions of this Act; (c) determination of time and value of supply of goods or services or both; (d) admissibility of input tax credit of tax paid or deemed to have been paid; (e) determination of the liability to pay tax on any goods or services or both; ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....each other around a table. The game consists of a number of deals each progressing through four phases. The cards are dealt with the players then the players call or bid in an auction seeking to take the contract specifying how many tricks the partnership receiving the contract needs to take to receive points for the deal. During the auction, partners use their bids to exchange information about their hands including overall strength and distribution of the suits. No other means of conveying or implying any information is permitted. 3.7 We like to reiterate that the applicant, in regard to the game of bridge played for money, has submitted as follows: • Matches during the tournaments may involve the players investing money or money's worth in each game. • Tournament organizers do not lien over this money or money's worth contributed by players. Contribution of money deposited in a common pool and an independent person sponsors prize money. • The winning team would advance to the next level gradually till final winning team is declared. In a recognized tournament, players gather points based on their performance which smooths their journey t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....onetary stakes does not partake the character of betting and it still remains within the realm of 'games of skill' only. The term 'betting and gambling' cannot be artificially bifurcated by the Respondents to carve out an exception by stating that 'games of skill' played with monetary stakes can also partake the character of betting and hence, be taxable at the rate of 28%. • 'Actionable claim' if any is between the players, which is also not taxable under GST laws, [as per Entry No. 6 of Schedule III of CGST Act] since actionable claims are excluded from the ambit of GST (except for lottery, betting and gambling; exceptions which are of no relevance since the games facilitated by the Petitioner qualify as 'games of skill' as has been confirmed by this Hon'ble Court). • The petitioner is an online intermediary who only provides services of facilitating skill-based game plays between the players and contractual terms of service with the player(s), would show that the petitioner was not supplying any "actionable claim": "Actionable claim" means a claim to an unsecured debt or to a beneficial interest in a moveable property. An actionable claim is a "chose in....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Supreme Court in Skill Lotto Solutions Pvt Ltd v. Union of India - 2020 SCC Online SC 990, such a transaction would be a supply of actionable claims in the form of betting and gambling. Consequently, the scheme of CGST r/w Rule 31A will govern the transaction to be taxed at 28% on 100% of the bet value. 3.12 The Hon'ble Karnataka High Court held as follows: • "The meaning of the terms "lottery, betting and gambling" as contemplated in Entry 6 of Schedule III of the CGST Act should be construed nomen juris in the light of the decisions of the Hon'ble Supreme Court, this Court and other High Courts supra which do not include games of skill." • "Taxation of games of skill is outside the scope of the term "supply" in view of Section 7 (2) of the CGST Act, 2017 read with Schedule III of the Act." • "There is no difference between offline/physical Rummy and Online/Electronic/Digital Rummy and both are substantially and preponderantly games of skill and not of chance;" • "The expressions, 'Betting' and 'Gambling' having become nomen juris, the same are applicable for the purpose of GST also and consequently, the said words, 'Betting' ....