Valuation of Supply – Online Gaming and Casinos

The CBIC has vide Notification No.45/2023 Dt.06.09.2023 introduced the Central Goods and Services Tax (Third Amendment) Rules, 2023 which will come into force on a date that will be notified by the Central Government in the Official Gazette.

The above mentioned amendment inserts two new rules i.e. Rule 31B and Rule 31C in the Central Goods and Services Tax Rules, 2017.

Rule 31B – Value of supply in case of online gaming including online money gaming:

• The value of supply of online gaming including supply of actionable claims involved in online money gaming, shall be the total amount paid or payable to or deposited with the supplier by way of money, money’s worth or virtual digital assets by or on behalf of the player;

• Any amount returned, refunded to the player or an amount not used by the player will not be deductible from the value of supply.

Rule 31C – Value of supply of actionable claims in case of casino:

The value of supply of actionable claims in casino shall be the total amount paid or payable by or on behalf of the player for:

• Purchase of tokens, chips, coins or tickets for use in casino; or

• Participating in any event, game, competition or any other activity or process in the casino, where the tokens, chips, coins or tickets are not required.

• Any amount returned, refunded by the casino to the player on return of tokens, chips, coins or tickets or otherwise will not be deductible from the value of supply of actionable claims in the casino.

Explanation: An amount won by a player in any event, game, scheme, competition, or other activity or process and used for further gaming or betting without its withdrawal will not be considered an amount paid or deposited with the supplier for the purpose of Rule 31B and Rule 31C.

The effect of the Explanation is that any amount won by a player and used for further gaming or betting without its withdrawal will not form part of value of supply.

Rupesh Sharma
Advocate practising in Chennai

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