India Supreme Court debates taxes on gambling and games of skill
A Government representative stated that, when wagers are involved, these games can no longer be considered games of skill.
Key points:
– Government and gaming industry representatives have debated status of games of skill when wagers are placed against them
– They have also debated whether these wagers are subject to the nation’s Goods and Services Tax (GST)
Legal debate has continued in India regarding the potential ‘metamorphosis’ of skill games like rummy and chess into games of chance, and whether the earnings from such games would be subject to the nation’s Goods and Services Tax (GST).
Justices J.B. Pardiwala and R. Mahadevan presided.
The Government and online gaming companies spoke in the Supreme Court on 5 May, according to local reports. Representing the Government, Additional Solicitor General N. Venkataraman said that with the addition of wagers on these games, they could no longer be considered games of skill. “Then it will become gambling, in spite of being a game of skill… Betting on a game of skill is statutorily considered gambling,” he said.
Opposingly, Senior advocate A.M. Singhvi, representing one of the gaming companies involved, argued: “Is the government saying that in chess, the moment I put money on it, the game metamorphosises from a game of skill into a game of chance? The character of a game cannot be so changed.” He also submitted that five judges and seven judge Benches agreed that games of skill were not categorised as change-based games.
Good to know: In February, the Advertising Standards Council of India (ASCI) signed a Memorandum of Understanding with three sports organisations to ward off illegal gaming ads
The debate follows a parliamentary exchange held in late March, where Union IT Minister Ashwini Vaishnaw spoke on individual states’ jurisdiction over their own gaming laws. It followed an inquiry by DMK MP Dayanidhi Maran, who questioned the central Government’s stance on online gaming.
As part of its regulatory efforts, the Government has banned over 1,400 gaming sites after receiving complaints.
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