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2024 (8) TMI 1438 - AAR - GSTSupply of specified actionable claims under section 2(102A) of the GST Act, 2017 or not - contributions/participation money paid/ stakes bought by the players for playing physical/offline game of bridge (when played for money) or winning thereof or organizing games/tournaments of bridge (when played for money) - HELD THAT - The actionable claim is a claim to unsecured debt or a claim to beneficial interest in movable property not in possession of the claimant. The applicant has submitted that contract bridge or simply bridge is a trick taking card game using a standard 52 card deck. In its basic format, it is played by four players in two competing partnerships with partners sitting opposite to each other around a table. The game consists of a number of deals each progressing through four phases. The cards are dealt with the players then the players call or bid in an auction seeking to take the contract specifying how many tricks the partnership receiving the contract needs to take to receive points for the deal. During the auction, partners use their bids to exchange information about their hands including overall strength and distribution of the suits. No other means of conveying or implying any information is permitted. In the case of State of Andhra Pradesh v. K. Satyanarayana Ors. 1967 (11) TMI 109 - SUPREME COURT , the Hon ble Supreme Court tested the game of Rummy on the principle of skill versus chance and held that The game of Rummy is not a game entirely of chance like the 'three-card' game mentioned in the Madras case to which we were referred. The 'three card' game which goes under different names such as 'flush', 'brag' etc. is a game of pure chance. Rummy, on the other hand, requires certain amount of skill because the fall of the cards has to be memorised and the building up of Rummy requires considerable skill in holding and discarding cards - it cannot be said that the game of Rummy is a game of entire chance. It is mainly and preponderantly a game of skill. The chance in Rummy is of the same character as the chance in a deal at a game of bridge. In Gameskraft Technologies (P.) Ltd vs Directorate General of Goods Services Tax Intelligence 2023 (5) TMI 926 - KARNATAKA HIGH COURT the issue before the Hon ble High Court of Karnataka was whether offline/online games such as Rummy which are mainly/preponderantly/ substantially based on skill and not on chance, whether played with/without stakes tantamount to gambling or betting as contemplated in Entry 6 of Schedule III of the Goods and Services Act, 2017. It is found that the issue whether offline/online games such as Rummy which are played with/without stakes tantamount to gambling or betting as contemplated in Entry 6 of Schedule III of the Goods and Services Act, 2017 is pending before the Hon ble Supreme Court. It appears that the proviso to section 2 (105) specifically deals with the supplier who organizes or arranges, directly or indirectly, supply of specified actionable claims. The issue in the present case is also to determine whether organizing games/tournaments of bridge (when played for money) qualifies as supply of specified actionable claims . However, the aforesaid proviso specifically mentions that consideration in money or money s worth has to be paid or conveyed to the supplier or through the supplier or placed at the disposal of the supplier - in the instant case, the applicant neither provides any online platform for participating in the game of bridge nor retains any amount of money as platform fee from the deposit amount made by each player. Further, the applicant being the organizer of the bridge tournament does not lien over the money or money s worth contributed by players. The applicant has submitted that the contribution of money is deposited in a common pool and an independent person sponsors prize money. Undisputedly organizing a tournament and allow the players to take part in the tournament against participation fee would qualify to be a supply of services by the organizer to the participants. However, even it is held that playing of bridge against money qualifies to be specified actionable claim , the applicant cannot be held to be engaged in supply of specified actionable claim by organizing the tournament of bridge where contribution of money deposited in a common pool and the applicant does not lien over this money or money s worth contributed by players. The applicant cannot be held to be a supplier of specified actionable claim and therefore shall not be liable to pay tax by way of organizing a tournament of physical /offline games of contract bridge when played for money.
Issues Involved:
1. Admissibility of the application for advance ruling. 2. Determination of taxability under the GST Act for physical/offline game of bridge when played for money/prize. 3. Classification of contributions/participation money collected from players or winnings from physical/offline games of bridge under the GST Act. Issue-wise Detailed Analysis: 1. Admissibility of the Application: - Section 97 of the GST Act: The applicant has made this application under sub-section (1) of Section 97 of the GST Act seeking an advance ruling. - Place of Business: The application was initially found to be devoid of any address in the State of West Bengal, indicating that the applicant doesn't have any place of business in the state. - Section 95 of the GST Act: The applicant argued that the GST Act does not require a place of business in the state before filing an application for advance ruling. The applicant submits that it is desirous of obtaining registration in the state if required under the law. - Authority's Observation: The GST Act unequivocally requires an applicant either to be registered or desirous of obtaining registration to make an application for advance ruling. The Authority admitted the application considering the local address provided by the applicant. 2. Determination of Taxability under the GST Act for Physical/Offline Game of Bridge When Played for Money/Prize: - Applicant's Argument: The applicant contends that contributions/participation money collected from players or winnings from physical/offline games of bridge do not qualify as 'specified actionable claims' under Section 2(102A) of the GST Act, 2017. - Legal Definitions and Judgments: - Public Gambling Act, 1867: Excludes games like Bridge from being treated as 'betting' and 'gambling'. - West Bengal Gambling and Prize Competitions Act, 1957: Excludes games of skill from the ambit of gambling and betting. - Supreme Court Judgments: In cases like State of Andhra Pradesh vs K. Satyanarayana and Dr. K.R. Lakshmanan v. State of T.N., the game of Bridge is considered a game of skill and not gambling. - Amendment in Schedule III of the GST Act: The amendment substituted 'specified actionable claims' for 'lottery, betting and gambling'. The applicant argues that Bridge does not fall under the category of 'specified actionable claims' which includes betting, casinos, gambling, horse racing, lottery, or online money gaming. - Authority's Findings: The Authority agrees that Bridge is a game of skill and does not fall under 'specified actionable claims'. Therefore, organizing a tournament of Bridge when played for money does not attract GST. 3. Classification of Contributions/Participation Money Collected from Players or Winnings from Physical/Offline Games of Bridge under the GST Act: - Applicant's Submission: The applicant is not collecting any participation fees for organizing physical tournaments of Bridge or any fee as a totalizator. The contributions are deposited in a common pool, and an independent person sponsors the prize money. - Authority's Findings: Organizing a tournament and allowing players to take part against a participation fee qualifies as a supply of services. However, since the applicant does not retain any amount of money as a 'platform fee' and does not have a lien over the money contributed by players, it cannot be held to be engaged in the supply of 'specified actionable claims'. Ruling: The applicant cannot be held to be a supplier of 'specified actionable claim' and therefore shall not be liable to pay tax by way of organizing a tournament of physical/offline games of contract bridge when played for money.
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