logo
Online RMGs tell SC bet money is not taxable income under Income Tax Act

Online RMGs tell SC bet money is not taxable income under Income Tax Act

The bet money placed by users in online real-money games (RMG) is neither accrued nor received by casinos and, therefore, should not be considered as income under the Income Tax Act, RMG intermediaries told the Supreme Court on Tuesday.
As per the Income Tax Act, a consideration is defined by law as any sum or value that is either received or recoverable from a user or a client in return for a service that has either been provided or will be provided. Since online RMGs do not accrue or receive the monies deposited by users for themselves, it cannot be considered taxable income, the counsel for the companies told the Court.
He further explained that when people play against the casinos, they settle with the winners and losers and then take whatever is left as surplus.
"We are not valuing the bet but the right to win. It's a different concept from bet value....As far as the face value of the bet is concerned, it belongs to the winner," he said. The court will continue hearing online RMGs' arguments until Friday.
In the last hearing, the companies had argued that the GST provisions before October 2023 were inadequate to impose a 28 per cent tax on online gaming operators in the manner attempted by the authorities. The government's reliance on Rule 31A of the GST Rules (value of supply in case of lottery, betting, gambling, and horse racing), introduced in 2018, was challenged because it lacked statutory authority under the Central GST (CGST) Act, the companies had said.
On Tuesday, online RMGs also contended that attempts to tax actionable claims like betting and gambling as 'goods' by amending the Goods Rate Notification were flawed. Until October 1, 2023, there was no entry for actionable claims in the Customs Tariff Schedule, making their classification as goods unsustainable under GST.
The petitioners (online gaming companies) explained to the court the distinction between platform fees, on which GST is already paid, and prize pool contributions made by players, which are held in trust and returned to winners. They claimed that prize pool contributions do not constitute consideration and thus cannot be taxed under GST.
In the case of online games, they argued that these games are played against each player, with the online gaming operator merely providing platform services, and that the platform operator, as the supplier of platform services, has discharged GST during the relevant period at the specified rate.
The division bench of Justices J B Pardiwala and R Mahadevan is hearing the case, which deals with the absence of clear taxing provisions to enforce tax collection before the October 2023 overhaul. The case, with an estimated financial impact of Rs 2.5 trillion, is one of the biggest tax battles in India's history. The matter will continue on Wednesday.
Orange background

Try Our AI Features

Explore what Daily8 AI can do for you:

Comments

No comments yet...

Related Articles

Delhi Govt Seeks Supreme Court Review Of Age-Based Vehicle Ban
Delhi Govt Seeks Supreme Court Review Of Age-Based Vehicle Ban

NDTV

time2 hours ago

  • NDTV

Delhi Govt Seeks Supreme Court Review Of Age-Based Vehicle Ban

The Delhi government has approached the Supreme Court seeking a review of the 'End-of-Life-Vehicles' (ELVs) ban. The government argues that it penalises middle-class vehicle owners without any scientific backing. It is to be noted that the government is required to phase out petrol vehicles older than 15 years and diesel vehicles older than 10 years in the national capital region under a 2018 Supreme Court order and a National Green Tribunal follow-up. Delhi government officials argued that these age-based standards overlook advancements in vehicle emissions technology, especially considering the April 2020 introduction of Bharat Stage VI (BS-VI) standards. Also Read: Tata Waiting Period Extends Over 6 Months; Check Details As per Indian Express, the application filed by Rekha Gupta government said, "the road-worthiness of a vehicle is a technical and scientific issue that must be linked to actual emissions as tested and recorded by mechanisms as set out under the Motor Vehicles Act, the Central Motor Vehicles Rules, etc., as opposed to blanket ban on the basis of age which is unlinked to actual emissions." Taking the argument further, Environment Minister Majinder Singh Sirsa mentioned that the government's review application emphasizes the need for data-backed assessment, rather than broad limitation, on the actual emissions produced by each vehicle, regardless of its age. Additionally, the government argues that owners of properly maintained vehicles are unfairly affected by the ban, which is implemented without considering maintenance, usage patterns, or PUC compliance, according to the plea. The Delhi government's petition highlights that around 2.8 million BS-IV and BS-VI vehicles are registered in the city. It argues that the current age-based ban could exclude compliant vehicles and calls for a scientific analysis by the Commission for Air Quality Management to assess if these bans effectively improve air quality in Delhi-NCR. This comes after a campaign targeting a fuel ban for older cars faced public backlash and was halted due to operational challenges.

Delhi govt urges Supreme Court to review 2018 order banning older vehicles
Delhi govt urges Supreme Court to review 2018 order banning older vehicles

Business Standard

time3 hours ago

  • Business Standard

Delhi govt urges Supreme Court to review 2018 order banning older vehicles

The Delhi government has petitioned the Supreme Court seeking a review of its 2018 order banning 10-year-old diesel and 15-year-old petrol vehicles in the National Capital Region (NCR). It argues that the directive lacks a scientific basis and imposes disproportionate hardship on residents, according to a report by Bar and Bench. The plea contends that the ban was not supported by any environmental impact study and has become outdated in light of stricter pollution controls introduced in recent years. This comes shortly after the Commission for Air Quality Management (CAQM) agreed to defer a related policy, fuel restrictions on end-of-life (EOL) vehicles, until November 1, 2025. Delhi fuel ban deferred after public pushback On July 9, the CAQM, a central authority tasked with air quality regulation in Delhi-NCR, decided to postpone the implementation of fuel restrictions on EOL vehicles. The original directive, scheduled to take effect from July 1, had prohibited fuel stations from supplying fuel to diesel vehicles older than 10 years and petrol vehicles older than 15 years, regardless of their state of registration. Delhi government called age-based vehicle ban 'arbitrary and outdated' In its latest application, the Delhi government has pointed to several key changes implemented after the Court's 2018 decision, including the nationwide adoption of Bharat Stage VI (BS-VI) emission standards in 2020. These newer standards, it stated, required vehicles to meet much stricter pollution norms. 'BS-VI engines are significantly less polluting,' the government argued, warning that allowing the 2018 order to continue would force roadworthy and compliant vehicles off the roads without scientific justification. The application also highlighted the strengthened Pollution Under Control (PUC) certification regime, the wider availability of cleaner fuels, and the growing presence of electric vehicles as evidence of a more evolved regulatory environment. Ban causes hardship on vehicle owners The government noted that many Delhi residents drive infrequently and maintain their vehicles in compliance with current norms, yet were still being penalised based on vehicle age alone. It also flagged the impact on the second-hand car market, which it said remained the only realistic option for many low-and middle-income families to access personal transportation. Delhi govt asks for scientific assessment on vehicle ban The Delhi government urged the Court to reconsider the blanket age-based ban and called for a scientific review of its effectiveness. Specifically, it asked that the Ministry of Road Transport and Highways and the Commission for Air Quality Management (CAQM) be directed to study: The actual environmental benefit of an age-based vehicle ban. The fairness and feasibility of a blanket restriction across all vehicle categories and technologies. Whether such a policy meaningfully contributed to air quality improvements in NCR compared to emissions-based strategies. It also cited global examples—such as the European Union, Japan, and the United States—where no age-based bans are in place, and where pollution is addressed through emissions testing, regulation, and urban planning. The court was scheduled to hear the application on Monday, along with two similar petitions filed by private individuals challenging the age-based restrictions.

Sam Altman warns ChatGPT is not your therapist and your secrets aren't legally private
Sam Altman warns ChatGPT is not your therapist and your secrets aren't legally private

India Today

time6 hours ago

  • India Today

Sam Altman warns ChatGPT is not your therapist and your secrets aren't legally private

If you've been spilling your heart out to ChatGPT, you might want to pause for a moment, or at least think carefully about what you're typing. OpenAI's CEO Sam Altman has recently admitted that, for now, AI chats don't enjoy the same confidentiality as a conversation with a doctor, lawyer or therapist. Appearing on comedian Theo Von's podcast This Past Weekend, Altman revealed that the AI industry simply hasn't caught up when it comes to protecting deeply personal conversations with users. And that could have consequences if those chats end up in talk about the most personal details in their lives to ChatGPT,' Altman confessed. 'People use it, young people, especially, use it as a therapist, a life coach; having these relationship problems and [asking] 'what should I do?' And right now, if you talk to a therapist or a lawyer or a doctor about those problems, there's legal privilege for it. There's doctor-patient confidentiality, there's legal confidentiality, whatever. And we haven't figured that out yet for when you talk to ChatGPT.'Altman warned that, as things stand, user conversations with ChatGPT could be disclosed if a court orders it. 'This could create a privacy concern for users in the case of a lawsuit,' he said, explaining that OpenAI would currently be legally obliged to produce those records. 'I think that's very screwed up. I think we should have the same concept of privacy for your conversations with AI that we do with a therapist or whatever — and no one had to think about that even a year ago,' he grey areasThe candid remarks come as OpenAI finds itself in the middle of a high-profile court battle with The New York Times. In June, the newspaper and other plaintiffs sought a court order demanding that OpenAI retain all user conversations, even deleted ones, indefinitely, as part of an ongoing copyright has described the request as 'an overreach' and confirmed it is appealing, arguing that allowing courts to dictate data storage would open the floodgates to future demands from law enforcement and legal OpenAI says deleted chats from ChatGPT Free, Plus and Pro accounts are removed from its systems within 30 days unless they need to be kept 'for legal or security reasons.'Unlike encrypted messaging apps such as WhatsApp, OpenAI's staff can access conversations. This is partly so that they can fine-tune the models and also keep an eye out for level of access has become a sticking point for some would-be users, particularly in a world where digital privacy is under increasing scrutiny. For instance, following the Supreme Court's overturning of Roe v. Wade in the US, millions of women moved away from unencrypted period-tracking apps towards safer alternatives such as Apple Not yetadvertisementAltman's warning might hit home for those who use ChatGPT as a sounding board for their emotional ups and downs. Without a legal framework, AI simply doesn't yet offer the same protection that a professional human counsellor does.'I think it makes sense to really want the privacy clarity before you use [ChatGPT] a lot, like the legal clarity,' Altman told Von, who admitted that he avoids using the chatbot much for exactly that while ChatGPT might feel like a non-judgemental friend, the legal system doesn't see it that way, at least, not yet.- EndsMust Watch

DOWNLOAD THE APP

Get Started Now: Download the App

Ready to dive into a world of global content with local flavor? Download Daily8 app today from your preferred app store and start exploring.
app-storeplay-store