Avani Maheshwari, BBA LLB (Hons.), NMIMS, School of Law, Mumbai
GAME OF SKILL VS GAME OF CHANCE
A show cause notice of INR 21,000 crore was issued by the Directorate General of GST intelligence to Gameskraft technologies private limited, for not paying GST from 2017 to 2022 amidst the controversial meet of the Group of ministers. The GOM was constituted by the GST council to formulate and examine the GST rate on online gaming industry. The constituted panel has recommended changes in the GST rate on online gaming industry and the same has attracted strong opposition from the players and the online operators. The entire controversy regarding taxation of online gaming revolves around the confusion and lack of clarity with respect to the classification of games. Games are classified as game of skill and game of chance.
Laws regarding gambling are vague and open-ended which leads to interpretative issues. The debate on game of skill vs game of chance is not new and there has been a lot of litigation on this matter. Indian courts have determined the classification based on the outcome of the game. Any game is considered to be a game of skill if the outcome of the game is predominantly driven by skill. On the contrary, any game is considered to be a game of chance if the outcome of the same is predominantly driven by luck. Some of the examples of game of chance are betting, gambling, etc. The question that arises next is what is the basis to determine what is game of skill and what is game of chance? The Indian Judiciary has dealt with numerous cases to determine the difference between game of skill and game of chance.
It was held by the Apec court in the case of State of Andhra Pradesh v. K. Satyanarayana, that the game of “Rummy” requires a certain degree of skill since the player has to memorise the fall of the cards and the game requires the player to use their skill while determining which cards to hold and which to discard as opposed to the game of “teen patti” which was held to be a game of chance.
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