Amendments in section 2 (Definitions)

1. a) Definition of specified actionable claim – Clause 102A is proposed to be inserted to define specified actionable claim to mean 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

Definition of online money gaming – Clause 80B is proposed to be inserted to define online money gaming to mean 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.

Definition of online gaming – Clause 80A is proposed to be inserted to define online gaming to mean offering of a game on internet or an electronic network and includes online money gaming.

Amendment in definition of supplier – Clause 105 is proposed to be amended by inserting a proviso therein.  The proviso lays down that a person who organizes 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.

All the provisions of the CGST 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 claim

Amendment in section 24 (Compulsory registration in certain cases)

Clause (xia) is proposed to be inserted in section 24 to provide that every person supplying online money gaming from a place outside India to a person in India shall be required to be mandatorily registered under the CGST Act, 2017.

Clause (5) of the bill seeks to provide that the amendments made under this Act shall be without prejudice to provisions of any other law for the time being in force, providing for prohibiting, restricting or regulating betting, casino, gambling, horse racing, lottery or online gaming.

Insertion of new section 14A:

Special provision for specified actionable claims supplied by a person located outside the taxable territory

A new section 14A is proposed to be inserted to provide as under:

i) A supplier of online money gaming located in a non-taxable territory shall be liable to pay IGST on the supply of online gaming by him to a person in taxable territory.

(ii) Such supplier shall obtain a single registration under the Simplified Registration Scheme as referred to in section 14(2).

(iii) If any person located in the taxable territory is representing such supplier for any purpose in the taxable territory, then such person shall get registered and pay the IGST on behalf of the supplier.  If the supplier does not have a physical presence or does not have a representative for any purpose in the taxable territory, then he shall appoint a person in the taxable territory for the purpose of paying IGST and such person shall be liable for payment of such tax.

(iv) Failure to comply with above provisions 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.

Amendment in section 2(17) (Online information and database access or retrieval services)

Sub-clause (vii) of clause (17) is proposed to be amended to exclude online money gaming as defined in section 2(80) of the CGST Act, 2017, from the scope of online information and database access or retrieval services.

Amendment in section 5 (Levy and collection)

Section 5 is proposed to be amended to provide that the IGST on goods other than the goods as may be notified by the Government on the recommendations of the Council imported in to India shall be levied and collected in accordance with the provisions of section 3 of the Custom Tariff Act, 1975 on the value as determined under the said Act at the point when duties of customs are levied on the said goods under section 12 of the Customs Act, 1962.

Thus, in case of import of such notified goods IGST shall not be levied in accordance with the provisions of section 3 of the Customs Tariff Act, 1975 read with section 12 of the Customs Act, 1962 but shall be levied and collected as inter-State supply as per the provisions of section 5(1).

Amendment in section 10 (Place of supply of goods other than supply of goods imported into, or exported from India)

A new clause (ca) is proposed to be inserted in section 10(1) to provide that where the supply of goods is made to an unregistered person, the place of supply shall be the location of the said person as recorded in the invoice and the location of the supplier where the address of the said person is not recorded in the invoice.

Further, the explanation to the clause clarifies that recording of the name of State of the said person in the invoice shall be deemed to be recording of the address of the said person