The new law is based on 28 percent on deposits while the erstwhile one was 28 percent on full face value of bets/CEA. The two concepts cannot exist together.
Further, if one were to accept the GST officials’ version of the new law being merely clarificatory, then the issue becomes even murkier! Quite clearly then the demand on Gameskraft by this logic itself, wasn’t proper. Also, how could both deposits and CEA have co-existed together?
The other effect of applying the new amendment retrospectively will be to provide a further boost to the pure gambling industry. Imagine a situation where a gambling operator was facing demands from the GST authorities for evading GST prior to the new amendments – the demand, rightly, would have been based on a 28 percent levy on CEA. Now, if the new amendment is sought to be applied retrospectively, then lo and behold, the GST demand on such pure gambling operators will fall drastically.
Can that ever be the intent?
There’s more to the gaming sector. A team of electrical engineers from the Indian Institute of Technology, New Delhi, researched and wrote a detailed paper on games of skill and chance. The paper, crafted by Taranjit Kaur, Manas Pati Tripathi, Ashirbad Samantaray, and Tapan K Gandhi investigated the degree of cognitive skills required for success in online versions of the popular card game rummy and poker. The study focused on analysing the impact of experience and learnable skills on success in online card games.
It further said in the ever-evolving world of digital entertainment, online games have emerged as a captivating force that transcends borders and brings people together in virtual realms. “With the rise of internet connectivity and technological advancements, online gaming experiences have become vivid in nature. Online card games like poker and rummy have established themselves as timeless classics that continue to captivate players of all skill levels. The effect of this online gaming on the sociological and psychological paradigm of people has been studied well.”
It will be fascinating to see how the story unfolds here: given the new GST law, will India actually welcome the pure gambling industry or is this a mistake and will be corrected by the Finance Ministry by maintaining the distinction between games of skill and chance and a better tax road map will be charted for the skill gaming industry.
(Shantanu Guha Ray is the Asia Editor of Central European News, UK and Zenger News, US. He is also a columnist with Moneycontrol. This is an opinion piece and the views expressed above are the author’s own. The Quint neither endorses nor is responsible for the same.)