Key Updates on GST Rules for Time of Supply and Taxable Value of Online and Casino Gaming

Simplified Explanation of Notification No. 50/2023–Central Tax

Heading: Update on Time of Supply for Goods Not Under Composition Scheme

Purpose of the Notification:

The notification updates the rules regarding the time of supply for certain goods under the Central Goods and Services Tax (CGST) Act, specifically for registered persons not opting for the Composition Levy.

Key Amendment:

1. Amendment to Notification No. 66/2017-Central Tax

• Old Rule:

• • The rule specified that registered persons who did not opt for the Composition Levy under Section 10 of the CGST Act should pay central tax on outward supplies of goods at the time of supply as specified in Section 12(2)(a) of the Act.

• New Rule:

• • From October 1, 2023, the rule has been updated to exclude registered persons making supplies of “specified actionable claims” from this requirement.
  • Example: If a business does not opt for the Composition Levy and sells goods, they typically need to pay the central tax at the time of supply. However, if the business is dealing with specified actionable claims (such as lottery tickets, betting slips, or other forms of actionable claims), this particular rule does not apply.

Simplified Explanation:

1. Scope of the Amendment:
   • The update clarifies that the specified time of supply rule (for paying central tax) does not apply to businesses involved in the supply of specified actionable claims.
2. Example:
   • Scenario 1: A company selling electronics and not opting for the Composition Levy must pay central tax when the supply of goods is made, based on the time of supply rules.
   • Scenario 2: A lottery company selling lottery tickets is also not opting for the Composition Levy. According to the new rule, the time of supply rule (as mentioned in Section 12(2)(a)) does not apply to them. Instead, different rules for actionable claims will govern their tax payment timings.

Effective Date:

• Implementation Date: October 1, 2023.

Summary:

Notification No. 50/2023 updates the CGST rules to specify that the time of supply rule for paying central tax does not apply to businesses making supplies of specified actionable claims, effective from October 1, 2023. This ensures clarity in tax obligations for businesses dealing in goods versus those dealing in actionable claims like lottery tickets.

Simplified Explanation of Notification No. 49/2023–Central Tax

Heading: New Rules for Determining the Value of Taxable Supplies for Online and Casino Gaming

Purpose of the Notification:

The notification establishes new rules for determining the value of certain taxable supplies, specifically related to online money gaming, online gaming, and actionable claims in casinos.

Key Details:

1. Notification Details

• Notification Reference: No. 49/2023–Central Tax
• Date Issued: September 29, 2023
• Effective Date: October 1, 2023

2. Notified Supplies Under Section 15(5)

The notification, issued under Section 15(5) of the Central Goods and Services Tax (CGST) Act, 2017, specifies the following supplies for which the value must be determined in a manner notified by the government:

• (i) Supply of Online Money Gaming
• (ii) Supply of Online Gaming (excluding online money gaming)
• (iii) Supply of Actionable Claims in Casinos

3. Simplified Explanation

• Online Money Gaming: Refers to activities where players wager money in online games where the outcome is based on chance, skill, or a combination. Examples include online poker, online betting, and other similar games.
• Online Gaming (Other than Money Gaming): Includes online games where the primary objective is not financial gain but could be for entertainment, such as online puzzles or trivia games.
• Actionable Claims in Casinos: Includes casino chips, tokens, or other forms of credits used for gambling activities in a casino.

How Value is Determined:

• Online Money Gaming: The value of this supply is calculated based on the total amount deposited or wagered by players, and any amounts refunded to players will not be deducted from the total value.
• Online Gaming: The value is determined based on the total amount paid or payable for accessing or participating in online games.
• Casinos: The value is based on the total amount paid or payable for purchasing chips or tokens and for participating in casino games, including any additional entry fees or charges.

Example:

• Online Money Gaming Example:

• • A player deposits $100 into an online poker account. If the player loses $50, the total value of the supply for tax purposes is still considered $100 (initial deposit) rather than $50 (amount remaining).

• Online Gaming Example:

• • A user pays $20 to access a trivia game. The value of this supply is $20, regardless of whether the user wins or loses.

• Casino Example:

• • A customer buys $500 worth of casino chips. The value for tax purposes is $500, regardless of any winnings or losses during gaming.

Effective Date:

• Implementation Date: October 1, 2023.

Summary:

Notification No. 49/2023 outlines how the value of taxable supplies related to online money gaming, online gaming, and casino actionable claims should be determined