The Central Government vide notification number 31 of 2023 issued on 18th August 2023 has notified the amendments relating to the online gaming, betting and gambling activities in both Central Goods and Services Tax Act (CGST Act), 2017 and Integrated Goods and Services Act (IGST Act), 2017.
The amendments were formulated in accordance with the suggestions of the GST council. Furthermore, the Council indicated that offshore online money gaming companies would now require compulsory registration. A new Section has been inserted for the same in the new amendments under IGST Act.
As per the newly added Section 14A, an online money gaming supplier, as defined in clause (80B) of Section 2 of the CGST Act, who is situated outside the taxable territory, will be obligated to pay integrated tax for the supply of online money gaming to an individual within the taxable territory.
However, for paying the integrated tax, the supplier of online money gaming shall obtain a single registration under the Simplified Registration Scheme referred to in sub-section (2) of Section 14 of IGST Act.
The Section 14 of the IGST Act states about the Special Provision for Tax Payment by OIDAR Services Supplier. The Section 14(2) particularly states that “The supplier of online information and database access or retrieval services referred to in sub-section (1) shall, for payment of integrated tax, take a single registration under the Simplified Registration Scheme to be notified by the Government.”
The provision stipulates that if there is someone situated within the taxable territory acting on behalf of such a supplier for any matter within the taxable territory, that person must undergo registration and pay the integrated tax on behalf of the supplier.
Furthermore, if the supplier lacks a physical presence within the territory or is without a representative, they must appoint someone within the taxable territory to handle the payment of
. This appointed individual will bear the responsibility for the payment of integrated tax.
The newly inserted Section has additionally outlined the repercussions if offshore online gaming suppliers fail to register. It specifies that in situations where the supplier does not register within the taxable territory either personally or through a representative for the purpose of paying integrated tax or both, irrespective of the provisions in Section 69A of the Information Technology Act, 2000, any information produced, sent, received, or hosted on any computer resource utilized for the provision of online money gaming by such a supplier shall be liable to be blocked for access by the public in such manner as specified in the said Act.”
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