Introduction
In the matter of the Bridge Federation of India[i], a decision was issued by the West Bengal Authority for Advance Ruling (‘Authority’) examining whether contributions or participation fees and winnings in offline bridge tournaments qualify within the scope of ‘specified actionable claims’ under s. 2(102A) of the Central Goods and Services Tax Act, 2017 (‘CGST Act’). The Bridge Federation of India (‘Applicant’) sought clarity on whether the organizing body of a bridge tournament would be liable to GST, where the players contribute to a common pool and the organizer does not retain any part of the money.
Brief Facts
The Applicant is the apex organization responsible for overseeing the game of bridge in India. It operates under the guidelines of the World Bridge Federation and is recognized by the Ministry of Youth Affairs and Sports, Government of India.
The Applicant had planned to organize an offline/physical bridge tournament in West Bengal, where participants would contribute money or stakes to play, and the prize money would be awarded to winners. It was decided that the tournament organizers would not retain any portion of the stakes contributed by the players or even charge a platform fee.
The Applicant sought this advance ruling to determine whether participation fees or winnings from physical bridge tournaments, when played for money, should be classified as a ‘supply of specified actionable claims’ under s. 2(102A) of the CGST Act, thereby making them liable for GST.
The application was filed under s. 97 of the CGST Act for an advance ruling. Initially, the Applicant was questioned for not having a business presence in West Bengal, but it argued that it was ‘desirous of obtaining registration’ in the state. Thus, the application was accepted by a local communication address.
Observations and Findings of the Authority
The Authority ruled that the applicant cannot be classified as a supplier of ‘specified actionable claims.’
While holding the same, the Authority referred to the definition of specified actionable claims in s. 2(102A) of the CGST Act includes activities such as betting, casinos, gambling, horse racing, lottery, and online money gaming. The Authority noted that offline bridge tournaments do not fall under any of these categories.
The Authority, while relying upon the judgments in the case of State of Andhra Pradesh v. K. Satyanarayana[ii] and Dr. K.R. Lakshmanan v. State of Tamil Nadu[iii], which held that games involving a preponderance of skill over chance do not qualify as gambling, distinguished bridge from the game of chance and held it to be a game of skill.
The Authority, therefore, held that bridge is a game of skill, and therefore, playing for money does not constitute betting or gambling, thereby making it a ‘specified actionable claim’.
The Authority further clarified that organizing a tournament and charging entry fees qualifies as a supply of services. However, since the Applicant does not exercise any control over the monetary contributions made by players, which are pooled and managed independently for the prize distribution, this lack of financial control over the stakes further strengthens the conclusion that organizing a bridge tournament does not amount to the supply of actionable claims.
The Authority referred to the Gameskraft Technologies (P.) Ltd. v. Directorate General of Goods Services Tax Intelligence[iv] case, where online platforms were discussed in the context of games of skill. It distinguished the present case from situations involving online platforms that retain a portion of the players' stakes as platform fees. In contrast, the Applicant, in this case, does not retain any money and is not an intermediary in the transfer of winnings, further supporting this conclusion.
Based on its findings, the Authority ruled that organizing a physical/offline bridge tournament played for money does not qualify as a supply of ‘specified actionable claims’, and therefore, the Applicant is not liable to pay GST on such activities.
Our Analysis
This ruling provides important clarity for organizers of skill-based games by reinforcing the legal distinction between games of skill and games of chance. The decision confirms that tournaments like bridge, where organizers do not control or profit from players' monetary contributions, are not classified as 'specified actionable claims' under the CGST Act.
By excluding these activities from the definition of supply, the ruling upholds the principle that skill-based competitions should not be taxed like gambling or betting. This reduces the regulatory burden on sports organizers, ensuring that traditional tournaments remain outside the purview of high tax rates meant for gambling activities. Furthermore, this interpretation under sch. III of the CGST Act provides crucial guidance on how GST applies to other games and events, offering consistency and legal certainty for stakeholders across the gaming and sports industries.
End Notes
[i] [2024] 166 taxmann.com 25 (AAR – West Bengal) dated 29.07.2024.
[ii] AIR 1968 SC 825
[iii] (1996) 2 SCC 226
[iv] [2023] 150 taxmann.com 252/98 GST 93 (Karnataka).
Authored by Nitish Solanki, Advocate at Metalegal Advocates. The views expressed are personal and do not constitute legal opinions.