Important Updates to CGST Tax Rates for Actionable Claims

Simplified Explanation of Notification No. 11/2023–Central Tax (Rate)

Heading: Amendments to CGST Rate Schedule for Goods

Purpose of the Notification:

This notification makes amendments to the Central Goods and Services Tax (CGST) rate schedule concerning the taxation of specified actionable claims.

Key Details:

• Notification Reference: No. 11/2023–Central Tax (Rate)
• Date Issued: September 29, 2023
• Effective Date: October 1, 2023
• Act Referenced: Central Goods and Services Tax Act, 2017 (CGST Act)

1. Changes in Schedule IV:

• New Entry Added:

• • S. No. 227A: The new entry specifies that the tax rate for “specified actionable claims” is to be determined.
  • Definition of Specified Actionable Claims:
    • Specified actionable claims include:
      • Betting
      • Casinos
      • Gambling
      • Horse racing
      • Lottery
      • Online money gaming
  • Explanation:
    • These actionable claims are defined under section 2(102A) of the CGST Act, 2017.

• Omission of Previous Entries:

• • S. Nos. 228 and 229 and their related entries are removed from Schedule IV. This suggests that some items previously listed are no longer covered under the same tax rules or categories.

2. Explanation Update:

• New Clause Added:
  • Clause (v): The explanation clarifies that any terms not defined in the notification but defined in the CGST Act, Integrated Goods and Services Tax Act (IGST), and Union Territory Goods and Services Tax Act (UTGST) should have the same meanings as assigned in those Acts.

3. Simplified Explanation:

• What This Means:
  • From October 1, 2023, the taxation rules for specified actionable claims, including activities like betting and online money gaming, will be updated.
  • This amendment introduces a specific entry for these claims in the CGST rate schedule, setting a framework for how they will be taxed.
  • Previous entries related to such claims have been removed, indicating a shift or clarification in how these items are treated for tax purposes.

4. Example:

• Scenario:
  • Suppose a casino operator previously referred to the old S. Nos. 228 or 229 for tax purposes. With these numbers now omitted and replaced by the new S. No. 227A, the casino operator must now refer to this new entry.
  • Application: If the casino’s services involve online money gaming, the tax treatment will now be based on the provisions specified under S. No. 227A from October 1, 2023.