INDIAN GAMING
Ministry of Finance bats for disbursal of lottery winnings through formal banking channels, doubles
Ministry of Finance on Monday informed Lok Sabha that a reference was received from Ministry of Home Affairs (MHA) for comments regarding disbursement of prize amount of lotteries through formal banking channel and comments in this regard have been sent to MHA. The Ministry stated that using formal banking
channel for any kind of transaction, including disbursement of lottery prize, is helpful in mitigating the associated money laundering/ terrorist financing / proliferation funding risks in view of the robust banking system and effective regulation/supervision of the regulated entities. In reference to the Section 194B of the
Income-tax Act, 1961 (‘the Act’), the Ministry stated that the person responsible for paying to any person any income by way of winnings from any lottery or crossword puzzle or card game and other game of any sort or from gambling or betting of any form or nature whatsoever, being
the amount or the aggregate of amounts exceeding ten thousand rupees during the financial year shall, at the time of payment, deduct income-tax at the rates in force. The Ministry further informed the lower house of
the Parliament that vide Finance Act 2023, the rate in force is 30%. This also includes winnings in kind or partly in cash and partly in kind. It is substantively charged to tax at the rate of 30% under section 115BB of the Act and no deduction on the winnings is allowed. On the question of tax evasion by lottery distributors, the Ministry stated that the IT
Department takes appropriate action in cases involving evasion of tax whenever any credible information/intelligence of violation of provisions of Direct Tax Laws relating to any taxpayer comes to its notice. Such action under Direct Tax laws includes conducting enquiries, mounting search and seizure or survey action, assessment and consequential actions thereto, wherever applicable as per the provisions of the Act. It is worth noting that the IT department in
October 2023 raided Lottery King Santiago Martin’s business and personal premises at four locations in Coimbatore. The Ministry said twelve (12) cases involving
GST evasion of Rs. 344.57 crore have been detected against lottery distributors and Rs. 621.56 crore (including interest and penalty) has been recovered/ realised from July, 2017 to till November 2023. The recovered amount has nearly doubled since March 2023 where stood at Rs. 354 crores then.
Maharashtra: Legislators question new GST bill and government’s ignorance towards online gaming addiction
Online gaming has been a topic of debate for ages and surely enough, it has become the central topic of discussion for the legislative council after the state recently passed the bill implementing 28% GST for online gaming, casinos and horse racing. During the discussion on the bill regarding GST for online games, several legislators raised concerns regarding online gaming and gambling addiction among the young population. Speaking on the matter, MLC Sachin Ahir said that online gaming apps like Dream11 have become so popular that school students are also playing using someone else’s ID. Most of the kids are now addicted to playing online games rather than actual sports.
Another MLC, Abhijit Wanjarri, talked about the bill
asking, “If increasing revenue is the main purpose, then one needs to rethink everything. Is the government trying to misguide our youth?” as per Times of India. “The document given by the government states
that registration for online casino, racing and gaming apps has to be done by defining their activities. The purpose for defining their activities may basically help to tax them more,” Wanjarri further added. Touching on the recent Mahadev Book illegal
betting app case, Wanjarri said, “Nobody really knows which app is being operated from here. The government does not even have an idea of the
money involved. When Maharashtra does not permit a physical casino, then how come an online one will be allowed through this GST bill.” Deputy CM Ajit Pawar who recently revealed the bill
implementing the new GST rate informed that they are getting the context wrong. “This has already been approved by the central government and is applicable across the country under one nation, one tax. When GST was introduced, every state gave its nod despite different parties being in power,” he said. A panel formed by the central government have
concluded that online gaming is a game of chance and liable for 28% tax and that all the states now have to follow the decision.
Founded by industry veterans, G2G News is an independent news portal covering all developments relating to online gaming,
poker, gambling, casino, cricket betting and esports in India and the Indian subcontinent.
Santiago Martin 28 JANUARY 2024
www.g2g.news
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