CBIC has issued Central Tax Notification 45/2023 dated September 6, 2023 to notify new CGST Rules 31B and 31C following recommendations of GST Council, pending further notification on commencement date of these new rules.
New CGST Rule 31B: Value of supply in case of online gaming including online money gaming
Rule 31B outlines how the value of wholesale supplies in the case of online gaming, including any actionable claims related to online money gaming, is determined. The total value includes the whole amount paid, payable, or deposited with the supplier by a player in any form, including virtual digital assets.
Significantly, the proviso states that any funds returned or refunded by the supplier to the player, including if the player does not use the money they’ve paid or deposited with the supplier for participating in any event, cannot be deducted from the total supply value of online money gaming.
New CGST Rule 31C: Value of supply of actionable claims in case of casino games
Rule 31C addresses the value of supply of actionable claims in the case of casino gaming. Like rule 31B, it states that the total value consists of all money paid or payable by a player, whether for tokens, chips, coins or tickets for use in the casino, or for participation in games, schemes, competitions, or any other activities where these items are not necessary.
Again, just like rule 31B, the proviso states that any sum returned or refunded by the casino to the player when tokens, coins, chips, or tickets are returned, will not decrease the value of the supply of actionable claims in a casino.
The underlying principle for both rules is that the money received by the player after winning an event, game, or any action which is further used by the player to participate in another event without retraction, will not be considered as part of the amount paid to, or deposited with, the supplier, on behalf of the player.
In essence, both rules put forward a robust system for determining the value of supply for online gaming and casino actionable claims, outlining the parameters and exceptions clearly while focusing notably on the nature of the gaming industry.
CBIC Central Tax Notification 45/2023 dated 06/09/2023: New CGST Rules 31B and 31C notified regarding Value of Supply (Online Gaming/ Actionable Claims)
Please clarify with an example and opine whether online gaming and casino companies did get a relief with these amendments.