INDIA MARKET UPDATE
been consolidated with the Gameskraft matter in the SC and are awaiting adjudication. In these matters the operators have challenged the legal provisions on the basis of which the show causes notices were issued. Hence, the issue is larger than the Gameskraft matter. However, in a positive breakthrough for the industry, the GST Council is reportedly considering amendments to the GST law, under which the government will be given the power to regularize non-levy or short-levy of GST, where tax was being short paid or not paid due to ‘common trade practices’. 28 It may be possible that the Government grants relief for past GST demands in cases where positions were taken on basis of industry practices or there was an industry-wide interpretational issue on the applicable rate of GST. However, at this stage, it is not clear what will be included in ‘common trade practices’. Further, it is not clear how the Government will ‘regularize’ non-levy / short-levy of GST i.e. whether GST will be completely waived or whether a GST waiver would depend upon payment of certain interest / penalty. In parallel, the Indian Government had introduced several amendments levying GST at the rate of 28 percent on the entire deposit value, with effect from October 1, 2023. The amendments also require compulsory GST registration for offshore gaming operators and blocking of gaming platforms in
c ase of non-compliance. Prior to the amendments, the GST authorities had requested MeitY to block several platforms 29 and estimated GST loss from offshore illegal betting firms amounting to US$2.5bn. 30 GST authorities have been actively pursuing gaming platforms that are not complying with the changes introduced. In March 2024, GST authorities reached out to MeitY asking them to block 60 gaming platforms for non-compliances. 31 Crackdown on Advertisements of Offshore Platforms The Ministry of Information and Broadcasting (“MIB”) and the Central Consumer Protection Authority (“CCPA”) under the Ministry of Consumer Affairs, have continued their active stance against advertisements for remote gambling platforms by issuing advisories. Media platforms, including social media platforms have been advised to refraining from publishing / broadcasting advertisements of “online betting platforms” 32 and surrogate advertisements for such platforms. The MIB advisories go on to specify that non-compliance falls foul under various statutes such as the Consumer Protection Act, 2019. 33 Further, the CCPA has specifically advised influencers / celebrities to refrain from endorsing and promoting activities related to betting and gambling. 34
TANISHA KHANNA Leader, TMT & Co- head Gaming Practice, Nishith Desai Associates For information contact +91 2261595019 tanisha.khanna@nishithdesai. com
PALAK KAPOOR Member, Nishith Desai Associates MORVI CHATURVEDI Member, Nishith Desai Associates
28 Recommendation of 53rd GST Council Meeting to insert Section 11A in CGST Act. 29 See https://www.medianama.com/2024/04/223-gst-authorities-meity-block-60-online-gaming-platforms/ 30 See https://economictimes.indiatimes.com/news/india/aigf-estimates-usd-2-5-bn-gst-loss-from-offshore-illegal- betting-firms/articleshow/109402214.cms?from=mdr 31 See https://www.ndtvprofit.com/gst/gst-authorities-notify-60-more-non-compliant-offshore-online-gaming-plat- forms-to-meity 32 MIB Advisory dated March 21, 2024 titled “Advisory on Celebrity/Influencer Endorsements and Advertisements, including Surrogate Advertisements, of Offshore Online Betting/Gambling Platforms reg.”. 33 MIB Advisory dated August 25, 2023 titled “Advisory on Advertisements including Surrogate Advertisements of Online Betting Platforms”. 34 CCPA Advisory dated March 6, 2024 titled “Advisory in terms of Consumer Protection Act, 2019 on Prohibition of Advertising, Promotion, and Endorsement of unlawful activities prohibited under various laws”.
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IMGL MAGAZINE | SEPTEMBER 2024
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