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RTP GST Series May 2024 (Part-11 : Concept of Online Money Gaming & Betting)

We have started a RTP series on GST in MCQ form where we will post MCQs along with detailed Explanations along with additional questions surrounding the concepts asked in RTP for GST CA Final issued for May 2024.


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Concept of Online Money Gaming & Betting


Facts

Fortune 365 is an online money gaming platform operating from UAE.  It provides its users a platform to play and win money in different games that are available on its portal.


In the month of December, Player A, an unregistered person located in India, deposited an amount of ` 10,000 (exclusive of GST) in the master wallet available on the portal of Fortune 365.  Subsequently, following transactions were undertaken by Player A in said month:


i.        Player A utilized the amount of Rs.2,000 from the master wallet towards playing a virtual racing game on the portal. As a winning amount, Rs.8,000 was credited to the master wallet of Player A. Further, He played another game of Rs. 5000 and lost the same.


Qns: What would be the GST Amount (GST Rate is 28%) Chargeable on the Transaction.

Options:

A. Rs. 2,800 i.e. (10000*28%)

B. Rs. 4,760 i.e. (10000+2000+5000)*28%

C. Rs. 1960 i.e. (2000+5000)*28%

D. Rs. 2240 i..e (8000*28%)


Answer: "A" i.e. Rs. 2,800 (10000*28%) (For Explanation, please refer Next Section) 


Additional Qns: Whether Fortune 365 (based out of Dubai) needs to take Registration in India.


Answer: Yes


Additional Qns: Whether Fortune 365 (based out of Dubai) needs to take Registration in India if Player is a Registered Tax Payer.


Answer: Yes


Additional Qns: In case, Fortune 365 is supplying online Gaming to a Registered Person (ABC) in India who will be liable to pay GST on the same.


Options:

A. Fortune 365 under Forward Charge

B. ABC under RCM as Import of Service


Answer: Fortune 365 under Forward Charge


Additional Qns: Whether Online Gaming is a Supply of Goods or Supply of Service


Answer: Supply of Goods


Additional Qns: On another portal operated by Fortune 365 in the name of Bet 180, Player A placed a bet of face value of Rs. 5,000 on an international wrestling match.  The amount of such bet was paid by the master wallet of Player A.  However, he lost the bet and hence the bet amount of Rs. 5,000 with applicable taxes was transferred from the master wallet to the bank account of Bet 180.


What Would be the GST Amount on this transaction


Options:

A. Rs.1400 (28%*5000)

B. No GST


Answer: Rs.1,400 (28%*5000)


Explanations

For Complete Details about GST on Online Gaming, please read at : "Everything to Know about GST on Online Gaming"


For Valuation Rules regarding Online Gaming & Casinos , Please read at "Valuation Rules for Online Gaming & Casinos"


For Compliance Requirements in case of Online Gaming (Offshore & Domestic), Please read at : "Compliance Requirements in case of Online Gaming under GST"



Key Points related to Online Gaming



  • As per Valuation Rule 31A, GST on Lottery needs to be paid on the Face Value of Bet Amount i.e. on Rs. 5000.

  • As  per  section 24(xia),  every  person  supplying  online  money gaming from a place outside India to a person in India (whether Register or Un-Registered) shall be required to obtain registration on a mandatory basis in India. For complete explanation, please read "Compliance Requirements in case of Online Gaming under GST"


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In case of any query, please raise in Comment Section.


Disclaimer: We have taken due care to the best of our knowledge while explaining the provisions surrounding the issue purely for informational/academic purpose. It should not be considered as professional advice or consultancy to be relied upon. While due care has been taken by Fab Gyan in preparing this article, certain mistakes and omissions may creep in. The Fab Gyan or its Author does not accept any liability for any loss or damage of any kind arising out of any inaccurate or incomplete information in this document nor for any actions taken in reliance thereon. 





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