{"id":253567,"date":"2023-07-26T20:30:19","date_gmt":"2023-07-26T15:00:19","guid":{"rendered":"https:\/\/blog.forumias.com\/?p=253567"},"modified":"2023-08-31T10:36:06","modified_gmt":"2023-08-31T05:06:06","slug":"arvind-datar-writes-with-high-gst-on-online-games-death-by-taxes","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/arvind-datar-writes-with-high-gst-on-online-games-death-by-taxes\/","title":{"rendered":"Arvind Datar writes: With high GST on online games, death by taxes"},"content":{"rendered":"\n

Source<\/strong>– The post is based on the article \u201cArvind Datar writes: With high GST on online games, death by taxes\u201d <\/strong>published in the \u201cmint\u201d <\/strong>on 25th July 2023<\/strong>.<\/p>\n

Syllabus: <\/strong>GS3- Mobilisation of resources<\/p>\n

Relevance:<\/strong> Issues related to taxation<\/p>\n

News- <\/strong>The 50th GST Council has decided to levy 28% tax on the gross amount involved in online games.<\/p>\n

What are the legal aspects related to games of skill and games of chance?<\/strong><\/h2>\n

The law clearly distinguishes between games of skill and games of chance<\/strong>.<\/p>\n

Games of chance, like roulette or lotteries, rely solely on luck or pure chance<\/strong> to determine the winner. These games are considered forms of gambling or wagering.<\/strong><\/p>\n

According to section 30 of the Contract Act, 1872<\/strong>, legal proceedings cannot be used to recover amounts due from such games.<\/p>\n

Section 12 of the Public Gambling Act, 186<\/strong>7 states that games of skill <\/strong>do not fall under the category of gambling.<\/strong> In these games, the player’s skill <\/strong>plays a significant role, and luck or chance<\/strong> has little to no influence on the outcome.<\/p>\n

What are issues related to the government ‘s move to levy 28% tax on gross amount involved in online games?<\/strong><\/h2>\n

In the world of online games, taxes are not imposed on the entire pooled money<\/strong>. Instead, it is levied on the amount charged for the service<\/strong> provided.<\/p>\n

The estimated annual GST collection<\/strong> from online games is around Rs 2,000 crore<\/strong>, which is only a fraction of the total annual GST collection<\/strong> of Rs 15 lakh crore.<\/p>\n

The Revenue Secretary claims that the new rates will result in an increased collection of Rs 17,000 crore to Rs 20,000 crore<\/strong>. This would require online games worth over Rs 60,000 crore <\/strong>to be played. It seems highly unlikely.<\/p>\n

Increasing tax rates does not guarantee a proportional increase in tax<\/strong> collected. The current taxation system focuses excessively on revenue maximisation<\/strong>.<\/p>\n

While the GST collection from the gaming industry might seem modest, it employs a significant number of people<\/strong> directly and indirectly. These employees will pay GST on the goods and services<\/strong> they consume, which should not be ignored.<\/p>\n

Implementing such a high GST rate is likely to benefit offshore gaming platforms with illegal activities<\/strong>. It could lead to the downfall of the gaming industry<\/strong> and substantial loss of employment<\/strong> without a significant increase in revenue<\/p>\n","protected":false},"excerpt":{"rendered":"

Source– The post is based on the article \u201cArvind Datar writes: With high GST on online games, death by taxes\u201d published in the \u201cmint\u201d on 25th July 2023. Syllabus: GS3- Mobilisation of resources Relevance: Issues related to taxation News- The 50th GST Council has decided to levy 28% tax on the gross amount involved in… Continue reading Arvind Datar writes: With high GST on online games, death by taxes<\/span><\/a><\/p>\n","protected":false},"author":10320,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[1230,9],"tags":[216,8184,11125],"class_list":["post-253567","post","type-post","status-publish","format-standard","hentry","category-9-pm-daily-articles","category-public","tag-gs-paper-3","tag-indian-economy","tag-mint","entry"],"jetpack_featured_media_url":"","views":{"total":2,"cached_at":"","cached_date":1698466741},"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/253567","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/10320"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=253567"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/253567\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=253567"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=253567"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=253567"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}