On September 26, 2024, the Delhi Legislative Assembly introduced the Delhi Goods and Services Tax (Third Amendment) Bill, 2024. This bill seeks to amend the Delhi Goods and Services Tax Act of 2017, addressing various aspects of taxation related to online gaming, casinos, and other forms of betting.
Key Features of the Bill
1. Amendments to Definitions
One of the most significant aspects of this amendment is the introduction of new definitions in Section 2 of the Delhi Goods and Services Tax Act:
- Online Gaming (Clause 80A): Defined as offering games over the internet, this clause explicitly includes online money gaming. This broader definition aims to encompass various forms of digital gaming that may require regulation.
- Online Money Gaming (Clause 80B): This term refers to any gaming activity where players deposit money with the expectation of winning money or assets. It covers a wide range of activities, irrespective of whether the outcome is based on skill or chance.
- Specified Actionable Claim (Clause 102A): This newly defined term includes claims related to betting, casinos, gambling, horse racing, lotteries, and online money gaming. By grouping these activities, the bill clarifies their taxability.
- Virtual Digital Asset (Clause 117A): This clause adopts the definition from the Income-tax Act, 1961, aligning the treatment of virtual assets across tax laws.
2. Registration Requirements
The bill introduces an important amendment to Section 24 by adding a new clause (xia). This clause mandates that any individual or entity supplying online money gaming from outside India to individuals in India must register under the Delhi Goods and Services Tax Act. This requirement aims to ensure that all online gaming operators are compliant with tax regulations, thereby increasing transparency and accountability.
3. Changes to Schedule-III
In Schedule III, which outlines exempt supplies under the Act, the wording has been updated. The terms “lottery, betting, and gambling” will now be replaced with “specified actionable claims.” This change helps to clarify the tax treatment of these activities, emphasizing their classification under the same umbrella.
4. Transitory Provisions
The bill also includes a transitory provision, stating that the amendments will not interfere with existing laws governing the prohibition, restriction, or regulation of betting, casinos, gambling, horse racing, lotteries, or online gaming. This ensures that the new regulations do not conflict with existing legal frameworks.
Statement of Objects and Reasons
The introduction of this bill is grounded in the need for clarity and uniformity in the taxation of various forms of gaming and betting. The GST Council, in its recent meetings, has acknowledged the necessity of addressing these issues to provide a consistent tax framework across both the Central and Delhi Goods and Services Tax Acts.
Key Objectives:
- Clarity on Taxability: The bill aims to provide clear definitions and guidelines regarding the taxability of casinos, online gaming, and other specified actionable claims.
- Uniformity: It seeks to align the Delhi Goods and Services Tax Act with the Central Goods and Services Tax Act to eliminate discrepancies and enhance regulatory compliance.
- Enhanced Registration: By mandating registration for online money gaming suppliers, the bill aims to bolster tax compliance and ensure that revenue is appropriately collected.
Significance:
The Delhi Goods and Services Tax (Third Amendment) Bill, 2024 has significant implications for businesses involved in online gaming, betting, and related activities. For operators, the requirement to register may entail additional compliance costs, but it also provides a legitimate framework to operate within. For consumers, this could enhance protections and transparency in online gaming activities.
