the essay of 3 June 2026 · the untouched capture
Rendered as it looked. Links and images are disabled in this view; the file itself is untouched.
<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN" "http://www.w3.org/TR/html4/loose.dtd"> <html> <head> <title>Untitled Document</title> <meta http-equiv="Content-Type" content="text/html; charset=utf-8"> </head> <body bgcolor="#FFFFFF"> <p><font face="Verdana, Arial, Helvetica, sans-serif" size="2"><strong><font color="#663399">JUNE 03, 2026</font></strong></font></p> <p align="center"><font color="#FF6633" face="Verdana, Arial, Helvetica, sans-serif" size="2"><strong> From Dice to Device: The Government Wins</strong></font></p> <p align="center"><font face="Verdana, Arial, Helvetica, sans-serif" size="2"><u><strong>By Vijay Kumar</strong></u></font></p> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2"><strong>A</strong> lawyer friend recently asked me what the outcome of the online gaming case in the Supreme Court would be. I took a chance - no skill and said, <em>"Revenue will win"</em> and it did. Had I bet on that, I too could have been a winner. I will try Las Vegas soon and try my chance - without GST. </font></p> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">There were two entries in List-II-State List in the Seventh Schedule to the Constitution, pertaining to <em>Betting and gambling </em> and there was an interesting discussion on these entries in the Constituent Assembly. </font></p> <blockquote><p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2" style="background-color:#f3dbcf"><em>34. Betting and gambling. </em></font></p><p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2" style="background-color:#f3dbcf"><em>62. Taxes on luxuries, including taxes on entertainments, amusements, betting and gambling. </em></font></p></blockquote> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">So, <em>Betting and Gambling</em>, could be taxed only by the States and not the Centre. </font></p> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">In the Constituent Assembly, Prof. Shibban Lal Saksena said, </font></p> <blockquote><p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2" style="background-color:#f3dbcf"><em>"Sir, betting and gambling are being legalised by this entry in the Schedule. I thought that gambling was a crime and so I am surprised to see that gambling and betting are provided for as a legitimate field of activity under this Schedule. In fact, I was sorry that entry No.78 in List I was passed without any opposition, [Lotteries organised by the Government of India or the Government of any State.] </em></font></p><p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2" style="background-color:#f3dbcf"><em>I think that this is against the principles to which we are committed. Gambling and betting should be banned. Sir, I strongly oppose this entry." </em></font></p></blockquote> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">Shri Lakshminarayan Sahu said: </font></p> <blockquote><p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2" style="background-color:#f3dbcf">Mr. President, I am opposing this for the reason that when we are going to build the entire structure of our State on the foundations of truth and non-violence, when we are guided by the lofty ideals of Mahatma Gandhi, there should be no mention at all of betting and gambling in the Constitution we are to frame. The very mention of these words would indicate that our National Government favours the idea of encouraging betting and gambling and seeks to have its own control on them. Have we forgotten the lessons of the Mahabharat? Taxation on such items does not appear proper. The clause relating to lottery laid down in the Constitution, is also not proper. </font></p><p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2" style="background-color:#f3dbcf">The Constitution Assembly, which is making the rules now, should prohibit it. Therefore, Mr. President, I oppose it. </font></p></blockquote> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">And Dr. Ambedkar gave a brilliant, but obvious answer: </font></p> <blockquote><p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2" style="background-color:#f3dbcf">Sir, I am very much afraid that both my friends, Mr. Shibban Lal and Mr. Sahu, have entirely misunderstood the purport of this entry and they are further under a great misapprehension that if this entry was omitted, there would be no betting or gambling in the country at all. </font></p><p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2" style="background-color:#f3dbcf">I should like to submit to them that if this entry was omitted, there would be absolutely no control of betting and gambling at all, because if entry was there, it may either be used for the purpose of permitting betting and gambling or it may be used for the purpose of prohibiting them. If this entry is not there, the provincial governments would be absolutely helpless in the matter. </font></p><p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2" style="background-color:#f3dbcf">I hope that they will realise what they are doing. If this entry was omitted, the other consequence would be that this subject will automatically be transferred to List 1 under entry 91. The result will be the same, viz. the Central Government may either permit gambling or prohibit gambling. </font></p><p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2" style="background-color:#f3dbcf">The question therefore that arises is this whether this entry should remain here or should be omitted here and go specifically as a specified item in List I or be deemed to be included in entry 91. If my friends are keen that there should be no betting and gambling, then the proper thing would be to introduce an article in the Constitution itself making betting and gambling a crime, not to be tolerated by the State. </font></p></blockquote> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">Entry 91 of the List 1 in the Seventh Schedule of the draft constitution read as: </font></p> <blockquote><p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2" style="background-color:#f3dbcf"><em>91. Any other matter not enumerated in List II or List III including any tax not mentioned in either of those Lists. </em></font></p></blockquote> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">So, any subject, (including any tax) not mentioned in List II or List III would automatically fall in List I and come under the jurisdiction of the Central Government. There is no way that a subject can be eliminated from these lists, unless as Dr. Ambedkar stated, it is so done by an Article in the Constitution. </font></p> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">Thus started the official entry of betting and gambling in the Constitution and GST laws. </font></p> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">Last week, the Supreme Court delivered a marathon judgement running into 417 pages on the legality of GST on betting and gambling. <em>DGGI Vs GAMESKRAFT TECHNOLOGIES PVT - <a href="https://taxindiaonline.com/caselaw/details?id=193031&type=caselaw" target="_blank"><strong>2026-TIOL-28-SC-GST</strong></a></em> </font></p> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">The Supreme Court judgement is being incisively analysed by tax experts of all verities. I will jest have a cursory look. </font></p> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">Everyone loses - except the taxman, who always wins. See how massive the case was. </font></p> <blockquote><p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">1. Revenue demanded more than two lakh crore rupees together with interest and penalty against Gameskraft whose revenue was barely 4,650 crores. </font></p><p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">2. Another demand against casinos of Rs. 16,822.97 crores, which along with interest and penalty would exceed Rs. 33,500 crores. </font></p><p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">3. Notice by the DGGI demanding differential GST of Rs. 7549,14,12,382/-. </font></p></blockquote> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">Before the Court spoke, the Additional Solicitor General presented his Ten Sutras, etched as pillars for the taxman's temple. </font></p> <p align="justify"><font color="#006600" face="Verdana, Arial, Helvetica, sans-serif" size="2"><strong>ASG's ten tenets: </strong></font></p> <blockquote><p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">1. There is no gambling if no stakes are involved, irrespective of whether the underlying game is a game of skill or game of chance as far as GST laws are concerned, since consideration is an essential ingredient for levy; </font></p><p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">2. There is gambling, once stakes are involved, irrespective of whether the underlying game is a game of skill or game of chance; </font></p><p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">3. A game of chance involving even a competition fee is gambling; </font></p><p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">4. A game of skill is per se not gambling; </font></p><p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">5. A game of skill, when played with stakes, makes it gambling; </font></p><p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">6. A game of skill played with stakes, though gambling, does not re- characterize the underlying game from game of skill into game of chance; </font></p><p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">7. Protection by some of the states on games of skill played with stake from penalty and prosecution is proof that the same is nothing but gambling; such an express carve-out exempting and protecting gambling on games of skill from penal consequences is called for only because it is otherwise<em> "gambling".</em> Games of skill played with stakes will not cease to be gambling merely because of a protection given from penal consequences; </font></p><p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">8. May it be a game of skill or a game of chance, playing for stakes makes it gambling as the outcome is not in the control of the betters and gamblers in both forms of games; </font></p><p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">9. The independent act of betting and gambling is only a chance and remains a chance irrespective of the fact as to whether the underlying game is a game of skill or game of chance. A chance on a game of chance and a chance on a game of skill will only remain a chance in both cases, and therefore, it is inappropriate to identify the chance of betting and gambling on a game of skill as not a chance but a skill, when the preponderance of uncertainty is the same in any form of game involving betting and gambling; </font></p><p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">10. When time tested jurisprudence has benchmarked betting and gambling, as similar expressions, the new evolution that only betting on gambling makes it gambling, has no basis. The GST laws have not used the expression betting on gambling. it has used the expression betting and gambling. </font></p></blockquote> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">I liked this sentence in page 33 of the judgement, <em>"Games of skill played with stakes will not <font color="#ff0000">seize</font> to be gambling merely because of a protection given from penal consequences." </em></font></p> <p align="justify"><font color="#006600" face="Verdana, Arial, Helvetica, sans-serif" size="2"><strong>Supreme Court's Key Conclusions on GST & Gambling </strong></font></p> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2"><strong>The Court listened, deliberated, and then shut every escape hatch with its own list of conclusions. </strong></font></p> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2"><strong> </strong></font></p> <div><table align="center" border="1" cellpadding="03" cellspacing="0" style="width:90%"> <tbody> <tr> <td align="justify" style="vertical-align:top"><font face="Verdana, Arial, Helvetica, sans-serif" size="2"><strong> </strong></font></td> <td style="vertical-align:top"> <div align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2" style="background-color:#f3dbcf"><strong>Issue / Point </strong></font></div> </td> <td style="vertical-align:top"> <div align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2" style="background-color:#f3dbcf"><strong>Judgement </strong></font></div> </td> <td style="vertical-align:top"> <div align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2" style="background-color:#f3dbcf"><strong>In plain words </strong></font></div> </td> </tr> <tr> <td style="vertical-align:top"> <div align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">1. </font></div> </td> <td style="vertical-align:top"> <div align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">Skill vs. Chance irrelevant </font></div> </td> <td style="vertical-align:top"> <div align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">If money is staked, GST calls it gambling </font></div> </td> <td style="vertical-align:top"> <div align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2" style="background-color:#dff3cb"><em>Whether chess or dice, the taxman sees only rupees rolling </em></font></div> </td> </tr> <tr> <td style="vertical-align:top"> <div align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">2. </font></div> </td> <td style="vertical-align:top"> <div align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">Actionable claims taxable </font></div> </td> <td style="vertical-align:top"> <div align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">GST applies to the supply of claims, not the play itself </font></div> </td> <td style="vertical-align:top"> <div align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2" style="background-color:#dff3cb"><em>The game is yours, but the claim belongs to Revenue </em></font></div> </td> </tr> <tr> <td style="vertical-align:top"> <div align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">3. </font></div> </td> <td style="vertical-align:top"> <div align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">Levy is constitutional </font></div> </td> <td style="vertical-align:top"> <div align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">Article 265 supports the tax </font></div> </td> <td style="vertical-align:top"> <div align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2" style="background-color:#dff3cb"><em>The Constitution may not guarantee happiness, but it guarantees GST </em></font></div> </td> </tr> <tr> <td style="vertical-align:top"> <div align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">4.</font></div> </td> <td style="vertical-align:top"> <div align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">Hardship vs unconstitutionality </font></div> </td> <td style="vertical-align:top"> <div align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">Losses don't invalidate a levy </font></div> </td> <td style="vertical-align:top"> <div align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2" style="background-color:#dff3cb"><em>Cry all you want, the taxman counts rupees, not tears </em></font></div> </td> </tr> <tr> <td style="vertical-align:top"> <div align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">5. </font></div> </td> <td style="vertical-align:top"> <div align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">Rules stand firm </font></div> </td> <td style="vertical-align:top"> <div align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">Valuation rules cannot be struck down separately </font></div> </td> <td style="vertical-align:top"> <div align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2" style="background-color:#dff3cb"><em>The fine print is as strong as the big print </em></font></div> </td> </tr> <tr> <td style="vertical-align:top"> <div align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">6.</font></div> </td> <td style="vertical-align:top"> <div align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">No escape via <em>"no transfer" </em></font></div> </td> <td style="vertical-align:top"> <div align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">Even without a pre-existing claim, GST applies </font></div> </td> <td style="vertical-align:top"> <div align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2" style="background-color:#dff3cb"><em>If there's a stake, there's a take </em></font></div> </td> </tr> <tr> <td style="vertical-align:top"> <div align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">7.</font></div> </td> <td style="vertical-align:top"> <div align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">Prize pools included </font></div> </td> <td style="vertical-align:top"> <div align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">Winnings and payouts are taxable </font></div> </td> <td style="vertical-align:top"> <div align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2" style="background-color:#dff3cb"><em>Even the jackpot is taxed before you touch it </em></font></div> </td> </tr> <tr> <td style="vertical-align:top"> <div align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">8. </font></div> </td> <td style="vertical-align:top"> <div align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">Rule 31A valid </font></div> </td> <td style="vertical-align:top"> <div align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">It's machinery, not a new levy </font></div> </td> <td style="vertical-align:top"> <div align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2" style="background-color:#dff3cb"><em>The gears of taxation grind smoothly </em></font></div> </td> </tr> <tr> <td style="vertical-align:top"> <div align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">9. </font></div> </td> <td style="vertical-align:top"> <div align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">2023 amendments retrospective </font></div> </td> <td style="vertical-align:top"> <div align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">Clarifications apply backwards </font></div> </td> <td style="vertical-align:top"> <div align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2" style="background-color:#dff3cb"><em>GST remembers everything, even what you forgot </em></font></div> </td> </tr> <tr> <td style="vertical-align:top"> <div align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">10. </font></div> </td> <td style="vertical-align:top"> <div align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">Platforms are suppliers </font></div> </td> <td style="vertical-align:top"> <div align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">Operators are the house itself </font></div> </td> <td style="vertical-align:top"> <div align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2" style="background-color:#dff3cb"><em>And the house always wins </em></font></div> </td> </tr> <tr> <td style="vertical-align:top"> <div align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">11. </font></div> </td> <td style="vertical-align:top"> <div align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">Math extrapolation allowed </font></div> </td> <td style="vertical-align:top"> <div align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">Statistics can support assessments </font></div> </td> <td style="vertical-align:top"> <div align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2" style="background-color:#dff3cb"><em>If you don't keep records, Revenue will do the math for you </em></font></div> </td> </tr> <tr> <td style="vertical-align:top"> <div align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">12. </font></div> </td> <td style="vertical-align:top"> <div align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">Challenges rejected </font></div> </td> <td style="vertical-align:top"> <div align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">All objections fail </font></div> </td> <td style="vertical-align:top"> <div align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2" style="background-color:#dff3cb"><em>The Court closed every escape hatch - Revenue walks away with the keys </em></font></div> </td> </tr> </tbody></table><p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2"><img src="https://admin.taxindiaonline.com/UploadedFiles/Customs/CaseLaws/2026/JestGST_030626.JPG" style="height:270px; width:449px"/></font></p></div> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">In short: The Court shut every escape hatch. Whether skill or chance, once money is staked, GST applies on the full value, retrospectively, constitutionally, and without sympathy. </font></p> <p align="justify"><font color="#006600" face="Verdana, Arial, Helvetica, sans-serif" size="2"><strong>Questions same - answers different </strong></font></p> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">Albert Einstein supposedly administered an exam to an advanced physics class. As his teaching assistant collected the papers, the assistant noticed something highly unusual. He looked at the test, then looked at Einstein, visibly confused. </font></p> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2"><em>"Professor," </em>the assistant hesitated, <em>"isn't this exactly the same exam you gave to this very same class exactly one year ago?" </em></font></p> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2"><em>"Yes, it is,"</em> Einstein replied calmly. </font></p> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2"><em>"But Professor," </em>the assistant countered,<em> "how can you give the exact same test to the same students twice?" </em></font></p> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">Einstein smiled and said, <em>"Because the answers have changed." </em></font></p> <p align="justify"><font color="#006600" face="Verdana, Arial, Helvetica, sans-serif" size="2"><strong>This is perhaps applicable to GST. The answers have changed. </strong></font></p> <p align="justify"><font color="#ff0000" face="Verdana, Arial, Helvetica, sans-serif" size="2">Until next week</font></p> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">Comments/feedback welcome at <a href="mailto:vijaywrite@tiol.in" target="_blank">vijaywrite@tiol.in </a> or 9848111243 (WhatsApp) </font></p> </body> </html>