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Karma Management Global Consulting Solutions Pvt. Ltd. is one of the top 5 consultancy firms, established in the year 2004, with headquarters in the business district of Santacruz East, Mumbai, India, and full-scale operation in all the States, having about 200 direct and indirect staff on its roll, is a leading service provider for payroll and payroll compliances, outsourcing, facility services, HR services, Training & Development, Recruitment & Talent Acquisition, Legal and Para legal services, Disputes and Litigation Handling, Inspection Management and Liaising, Advisory Services, Social, Environment and Vendor Audits, Regulatory Compliances, and Governance.
Compliance with labour and employment laws has become one of the most important issues that many establishments in India have to deal with. Many employment disputes result in litigation and take a prolonged time for effective conclusions. Karma Global is an Indian HR, Payroll, and Compliance Firm advising clients worldwide on local, regional, and global regulatory compliances in relation to their business goals, business strategies, and resolving disputes.
It gives valuable suggestions and advice to Corporates, Investors, Institutions, Contractors, Establishments, Industries, etc. on the need for lowering employment risk across all levels and adhering to the laws of the land. It has a lot of expertise on employment-related compliance issues, as well as day-to-day support for Human Resource Services with in-house Counsels.
Karma Global is also into employment agreements and policies, structuring of compensation and benefits, employment aspects of merger and takeover, etc.
Karma Global’s force, strength, and reach have brought in tremendous change over from its earlier image of being a consultancy firm in the period of 2000 to now embarking on setting strategies and practices abroad in highly regulated markets and competing in the global arena.
With India overtaking UK to emerge as the fifth largest economy in the world and setting to become the third largest by 2029, Karma Global is poised for long-term value in terms of clients outreach and giving state-of-the-art technology and excellent services to global clients better than ever before,
PM’s office overruled a proposal to only regulate games of skill and leave out games of chance.
Background
The Indian online gaming industry has faced much scrutiny over the past year. A lot is happening, from fighting for legal validation to facing a future crippled by heavy taxation. It’s only recently that the Indian government has woken up to the burgeoning potential of the industry and, at the same time, has also been pondering on how best to regulate the industry to prevent tax evasion.
The latest news on this front is that the Prime Minister’s office overruled a proposal only to regulate games of skill and leave out games of chance. According to sources, the government is working on online gaming regulations that will apply to all real-money games, both skill and chance.
Simultaneously, the Income Tax Department has started scrutinizing closely the IT returns filed by professional poker players, with several of the country’s top poker pros receiving notices under Section 142 of the Income Tax Act of 1961.
Government Plans Federal Oversight of All Real-Money Online Games
A panel tasked with drafting the regulations for the online gaming industry in August proposed a new body to decide whether a game involves skill or chance and then let skill games be governed by planned federal rules that call for registration requirements, know-your-customer norms, and a grievance redress mechanism. The panel also proposed that games of chance could stay under the purview of individual state governments, which would be free to regulate them.
In an October 26 Government meeting, an official from Prime Minister Narendra Modi’s office objected to such a differentiation, calling for expanded oversight on all types of games, according to the confidential minutes of the gathering.
Three people directly involved in the rule-making process, including two government officials in New Delhi, told that the rules would give the central administration broader oversight on all types of games. In contrast, state governments will remain empowered to impose outright bans on gambling or games of chance.
The drafting of the new regulations comes amid growing concerns that the proliferation of such games, particularly among young people, had led to addiction and financial losses, with reported cases of suicide.
IT Department Starts Sending Notices to Professional Players
Real-money online games have become hugely popular in India, prompting foreign investors like Tiger Global and Sequoia Capital to back local gaming startups Dream11 and Mobile Premier League. With the government realizing how cash-rich the industry is, the IT Department has come out all guns blazing to crack down on the industry.
In August, the Central Board of Direct Taxes (CBDT) urged the winners of online games to file updated income tax returns (ITR-U) for their last two-years income and pay the applicable taxes. This step has essentially been taken to target Indian players who have not disclosed their winnings correctly or may not have paid tax dues on winnings in online and offline tournaments outside India or on international sites.
A new provision (ITR-U) in the Income Tax Act 1961, which was added four months ago, allows taxpayers to update their ITRs within two years of filing, on payment of additional taxes, in case of errors or omissions.
Taxpayers can file the revised return after the relevant assessment year but within 24 months.
The Directorate General of GST Intelligence (DGGI) has also begun issuing notices to online gaming operators. In September, the DGGI issued the biggest show cause notice in the history of indirect taxation worth ₹21,000 Crores to the Bengaluru-based online gaming company, Gameskraft Technology Private Ltd (GTPL), alleging non-payment of GST (Goods and Services Tax) for the period between 2017 to June 30, 2022.
Gameskraft Technology was accused of promoting online betting through card, casual, and fantasy games like Rummy Culture, Gamezy, Rummy Time, etc. DGGI has slapped a 28% tax on betting amounts of nearly ₹77,000 Crores. The matter is currently under appeal in court.
According to official sources, tax authorities believe that online gaming companies have allegedly conducted massive tax evasion in the past few years.
The IT Department has started sending notices to professional gamers in its most recent crackdowns. Many of the country’s top poker pros (at least 50, though the number could be higher) have received notices under sub-section (1) of Section 142 of the Income Tax Act of 1961. This move has been made to squeeze out the tax evaders.
48th GST Council Meeting May Be A Cliffhanger
We are some weeks from the 48th GST Council Meeting that could decide the fate of India’s burgeoning online gaming industry. The GOM of state finance ministers is yet to submit its report on GST of the booming online gaming sector, which is crucial to a final decision on how the levies should be imposed.
The panel has for months been deliberating how it should tax online gaming companies — and whether federal tax should be imposed on only the commission charged by the operators or the value of the entire pool of money collected from participants. A senior government official stated on December 5 that the panel is unlikely to reach a consensus this month.
The much-awaited regulations are shaping the future of India’s gaming sector,which research firm Redseeer estimates will be worth $7 Billion by 2026, dominated by real-money games.
One of the government sources said Modi’s administration continues to be concerned about potential addiction to such platforms. The government panel’s August report recommended new rules should include so-called “de-addiction measures” such as periodic warnings and advisories and fixing deposit and withdrawal limits.
CONCLUSION – CHALLENGES IN THE ONLINE GAMING INDUSTRY ….!
What are the challenges in the online gaming industry?
To grow online gaming, industry experts agreed that success involves addressing three main challenges:
(1) responding to new customer trends,
(2) winning out over the increasing competition,
(3) and navigating ever-changing state and local laws
States also have divergent views on online and physical versions of the real money games, e.g., in Kerala betting with stakes for rummy is permitted in physical parlors but not online. The State Law Commission of Uttar Pradesh3 has introduced a draft bill including online gaming. Press articles indicate that the State Government of Karnataka also made a submission to the Karnataka High Court of its plan to enact legislation on online betting and gambling soon.
The multiplicity of legislation in the country is currently proving to be a challenge for gamers and gaming companies alike. Since all online gaming requires is a phone, tablet, PC, or laptop and the internet, the location and legality of different state laws is an inconvenience and deterring too many. This is not at all encouraging and makes it difficult to promote growth in a sector that can create incomes, both as employment income and professional gaming income – a very lucrative new-age career. There are subjective tests for poker, rummy, bingo, horse racing, fantasy sports, etc.
The gaming industry is witnessing a paradigm shift with the evolution of television, digital, and online gaming models. Post-demonetization, digital online payment systems have provided a boost to the online gaming industry. The Madras High Court had urged that it is essential to have a regulatory framework to deal with online gaming.
What is the future of online gaming in India?
The Indian gaming and e-sports sector has witnessed tremendous growth over the past few years, and there is no doubt that this growth will skyrocket even more in the years to come. Industry estimates predict that the number of online gaming users in India is poised to grow from 481 Mn in 2022 to over 657 Mn by 2025.
What is the addiction to online games?
Video game addiction, also called internet gaming disorder, is a condition characterized by severely reduced control over gaming habits, resulting in negative consequences in many aspects of your life, including self-care, relationships, school and work.
What are the negative effects of online games to students?
- Some of the most common negative effects of video games include:
- Poor sleep hygiene.
- Physical health atrophy.
- Exhaustion.
- Dehydration.
- Obesity and heart problems.
- Aggression.
- Lack of motivation.
- Depression.
Karma Global is a fully homegrown successful Outsourcing and Labor Laws Organization, operating both with contract employees as well as with permanent types of employees who are placed in numerous locations of global and domestic clients.
Karma Global has traditionally been a dynamic Regulatory Compliance driven organization with an integrated and up-to-mark approach to HR Services.
Karma has always set its sights on keeping a tab and interpreting the regulatory changes in the manner required by authorities with a focus on the implementation of these new rules coupled with the adeptness to sophisticated technology, which has placed them in the top 5 consulting organizations today as far as HR Service Organization is concerned.
Karma Global’s experts sitting in various offices and catering to over 500 clients are fully intertwined with the workflow and processes that are leading most of its clients to convert their value drivers into the transformation of their businesses and objectives for effective results.
Karma Management’s technology securely integrates regulatory compliance across all types of businesses from trading to operations to investor services to financials and banks while also providing the clients access to these technologies with the power to control process operations with a dashboard and ready updates on the workflows done monthly and timely as per stipulated dates set by the authorities.
The greatest satisfaction comes from the outflow of communication to clients for future reviews and analysis of the monthly work done with data visualization tools that surface their activities done by the professional teams of Karma in its Corporate Headquarters in Mumbai and Branch Offices in Bangalore, Tamil Nadu, Gurgaon, Gujarat, Pune, etc.
Proprietary blog of Karma Management Global Tech Firm
This blog has been collated and compiled by the internal staff of Karma Global with the knowledge and expertise that they possess, besides adaptation, illustration, derivation, transformation, collection as well as auto-generation from various sources, for its monthly newsletter Issue 09 of March 2023 and in case of specific or general information or compliance updates for that matter, kindly reach out to the Marketing Team – Kush@karmamgmt.com / yashika@karmamgmt.com