New
Published on:
February 20, 2023
By
Paramita

An Area of Litigation In GST – Actionable Claim

The introduction of GST (Goods and Services Tax) in India has brought about a number of changes in the way businesses are conducted. One of the areas of litigation in GST that has been gaining prominence in recent times is the concept of actionable claim. In this article, we will discuss the perspective of the gaming industry on the issue of actionable claim in GST.

What is actionable claim?

Before we delve deep into the issue of actionable claim in GST, it is important to understand what exactly is meant by the term. An actionable claim is a claim to any debt, other than a debt secured by mortgage of immovable property or a pledge or hypothecation of movable property, or to any beneficial interest in movable property, not in possession either actual or constructive, of the claimant, which the civil courts recognize as affording grounds for relief, whether such debt or beneficial interest be existent, accruing, conditional or contingent.

Actionable claim in GST

The concept of actionable claim under GST has created a lot of confusion and ambiguity among businesses. According to the GST Act, actionable claims are not considered as goods or services, and therefore, cannot be taxed. However, the issue arises when it comes to the gaming industry, where the virtual goods and currency used within a game are considered as actionable claims.

Perspective of gaming industry

The gaming industry has been growing rapidly in India, and with the introduction of GST, it has faced a number of challenges. One of the major issues that the industry faces is the taxation of virtual goods and currency used within the game. Since these virtual goods and currency are considered as actionable claims, they are not subject to GST. However, the industry argues that since these virtual goods have a real-world value and can be traded outside the game, they should be subject to GST.

Another issue that the gaming industry faces is the lack of clarity on whether the sale of virtual goods and currency within a game constitutes a supply of goods or services. If it is considered as a supply of services, it would be subject to GST, but if it is considered as a supply of goods, it would not be subject to GST.

Conclusion

The issue of actionable claim in GST has created a lot of confusion and uncertainty among businesses, especially in the gaming industry. While the GST Act clearly states that actionable claims are not subject to tax, the gaming industry argues that virtual goods and currency used within a game should be subject to GST, as they have a real-world value. The lack of clarity on whether the sale of virtual goods and currency within a game constitutes a supply of goods or services further adds to the confusion.

It is important for the government to address these issues and provide clarity to businesses, especially those in the gaming industry. This will not only help the industry grow but also ensure that businesses are able to comply with the GST laws without facing any undue hardships.

Suggestions



Effects of Section 16(2)(ba) in GST Act
GST Rate HSN Code for Vegetable Products - Chapter 6
GST Rates and HSN Code for Quaternary Ammonium Salts, Hydroxides

Updated on:
March 16, 2024