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Tax Alert: Clarifications on Section 194Q-TDS on Purchase of Goods

06 July, 2021
Sandip Mukherjee
Nihar Tank
Preeti Kothari

The Central Board of Direct Taxes (CBDT) introduced a new Section 194Q in Finance Act, 2021, which is effective from 01^st July 2021, for withholding tax at source on payments made for the purchase of goods.

The provision of Section 194Q states that:

Any person, being a Buyer, having a turnover or gross receipts exceeding INR 10 crores during the preceding financial year;
While making payment of any sum to any resident (Seller) for purchase of any goods of the value, where the aggregate of such value exceeds INR 50 lakhs in the previous year
Shall at the time of credit of such sum to the account of the Seller or at the time of payment, whichever is earlier, deduct an amount equal to 0.1% percent as income tax.

The above provision is not applicable, where:

Tax is deductible under any other provision of the Act; or
Tax is collectible under the provision of section 206C of the Act, other than transactions covered u/s. 206C(1H) therein.

The CBDT has received several representations with respect to practical challenges that may arise in the implementation of section 194Q. To address the difficulties that may arise, the CBDT has issued Circular No 13[1] of 2021 providing various clarifications regarding section 194Q.

194Q is not applicable in the following situations:

As per the Circular, ambiguity is removed on the applicability of section 194Q in a number of cases. CBDT has clarified that section 194Q is not applicable in the following situations:

Transactions relating to securities and commodities, which are carried through recognized stock exchanges, including exchanges that are located in the International Financial Service Centre.
Transactions in electricity, renewable energy certificates, or energy certificates traded through registered power exchanges.
Payments by non-resident Buyers unless if the purchase of goods is not effectively connected with the Permanent Establishment / fixed place of business of such non-resident in India.
On purchase of goods from a Seller whose income is exempt from tax. Similarly, it is clarified that tax collection at source (TCS) provisions under section 206C (1H) of the Act would not be applicable if the Buyer’s income is exempt from tax. However, these exemptions would not be applicable if only part of the Seller’s/Buyer’s income is exempt.
In the year of incorporation of the Buyer, the threshold of INR 10 crore would not be satisfied.
Transactions, where either payment or credit for the transaction happened before 1st July 2021.
TDS would not be applicable on the GST amount if the GST amount is separately indicated in the invoice. However, in the case of advance payments, the TDS under section 194Q will have to be discharged on the entire amount, as it is not possible to identify the GST component.

Calculation related clarifications

It has been clarified that for calculating the threshold of INR 50 lakhs in respect of a particular Seller, the transaction for the whole FY 2021-22 shall be considered, starting from 1st April 2021 and not from 1st July 2021.
For computing threshold of INR 10 crore in respect of the Buyer, only business turnover or gross receipts from business activities is to be considered. As such, turnover or gross receipts from non-business activities would not require to be taken into consideration.
In case of purchase returns, the TDS deducted on such purchases under section 194Q shall need to be adjusted against subsequent purchases from the same Seller, if the money is refunded by the Seller to the Buyer. However, no adjustment will be required in cases where the purchase return is replaced by goods by the Seller.

The interplay between sections 194O, 194Q, and 206C(1H) of the Act:

If Section 194O is applicable on any particular transaction, then Section 194Q shall not be applicable;
If both section 194O and section 194Q are applicable, then section 194O will prevail;
Section 206C(1H) is not applicable if TDS is deductible u/s. 194O or Sec 194Q;
If both sections 194O and 206C(1H) are applicable, then 194O shall prevail. Even if TCS is collected by the Seller still tax deduction responsibility of the E-commerce operator under section 194O cannot be condoned; this is because the prescribed tax rate under section 194O is higher than the prescribed tax rate u/s. 206C(1H);
If both sections 194Q and 206C(1H) are applicable, then section 194Q shall prevail. However, for ease of business, if TCS under section 206C(1H) has already been collected by the Seller then section 194Q would not be applicable; this is because the prescribed tax rate for deduction under section 194O and the prescribed tax rate for collection under section 206C(1H) are the same.

Comments:

This Circular is an extremely welcome one and has several important clarifications that have been issued by the CBDT before the enactment of the provisions of sections 194Q and 206C(1H). The Circular provides clarity vis-à-vis the scope of the relevant provisions, calculation of thresholds, interplay between overlapping provisions etc.

However, there are still some niggling doubts that prevail, requiring further clarity. For instance, while calculating the threshold of turnover or gross receipts of INR 10 crore w.r.t the Buyer, whether the amount considered should include or exclude the GST component.

Also, it would help if it is prescribed for the Seller to obtain a “no deduction” declaration from the Buyer w.r.t TDS under section 194Q, in a situation where both sections 194Q and section 206C(1H) are jointly applicable on the same transaction and tax has already been collected and paid under section 206C(1H) by the Seller.

References

[1] Circular No 13 of 2021 dated 30th June 2021 (F No. 370142/26/2021 – TPL

Image Credits: Photo by Kelly Sikkema on Unsplash

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The Concussion Conundrum

08 December, 2020
Santosh Vikram Singh

The first T20 International Cricket match between Australia Vs. India played on December 4, 2020, at Manuka Oval, Canberra witnessed an unusual controversy. During the inning break, on-field cameras captured the animated discussion between the match referee David Boon and the Australian head coach Justin Langer. The issue was centered on the decision of the match referee about concussion replacement player Yuzvendra Chahal for concussed player Ravindra Jadeja.

During the last over of India’s inning, a beaming delivery of Mitchell Starc hit Ravindra Jadeja on his helmet. Though Jadeja went on to complete that over without any complaint or call for help, later reported dizziness in the dressing room. As per the news reports, the team medics after examining the player suspected of concussion hence sought concussion replacement.

The team medics seem to have duly followed the ICC Rules on their part by completing the required formalities. Match Referee, David Boon who approved India’s concussion substitute had an animated conversation with Justin Langer followed by outbursts from certain Australian players and the decision being questioned by Cricket experts and scrutinized by the media.

ICC Rules & Guidelines on Concussion Replacement:

Well, to lay rest to these speculations and determine if the Indian team subverted the rules, it is important to look at the International Cricket Council (ICC) Rules and Guidelines concerning concussion replacement. The concussion rules were implemented to restrict a player from being unduly exposed to health risks and also to save a team from being disadvantaged if their player is concussed.

The concussion replacement issue is dealt with under Rule 1.2.7 of the ICC Men’s Twenty20 International Playing Conditions which was introduced in July 2019. The Rules allow a ‘like-for-like’ replacement in case a player is concussed, i.e., an injury is caused to the head or neck during the course of the match and the incident had occurred within the playing area.

The team medical representative is responsible for diagnosing the player and submitting the request for concussion replacement to the Match Referee. Rules 1.2.7.1.3.4 mandate that the concussion replacement request shall be a like-for-like for the player who has sustained the concussion or suspected concussion.

As per Rule 1.2.7.3, the ICC Match Referee should ordinarily approve a Concussion Replacement Request if the replacement is a like-for-like player whose inclusion will not excessively advantage his team for the remainder of the match. Further, the ICC Match Referee should consider the likely role the concussed player would have played during the remainder of the match, and the normal role that would be performed by the nominated Concussion Replacement. The decision of the match referee in this regard is final and cannot be appealed.

Did India and the Match Referee follow the Rules?

Let us analyze the core issues which became the point of discussion and disagreement and caused the stir.

a) Player Assessment

The major issue was that the player was not assessed after he was hit and hence there was a breach of protocol by team India. Let us look at the ICC’s concussion management guidelines and refer to section “Clear and immediate diagnosis of concussion” which reads as:

When should a team doctor/physio run out for an on-field assessment?

If called on by the umpire;
If a player is down and players are calling for assistance;
Immediately, if there is a head knock and the player is unable to resume after 3 to 4 seconds;
If a player calls for a new helmet following a head injury; and
At the end of the over, if the player resumes play after having sustained a blow to the head.

Analyzing, the above guidelines team India does not seem to have breached any protocol as the player was attended and assessed in the dressing room by the team medics immediately after the (final) over in which he was hit, therefore falling under the fifth scenario. Hence, the objection of an unfair advantage being taken solely on this ground cannot be sustained. Moreover, given the medical expertise and sensitive nature of the injury, the opinion of the medics can also not be called into question or be disregarded.

b) Like-for-like replacement:

The second issue, which caused much furor was whether the replacement player (Yuzvendra Chahal in this case) could be considered a ‘like-for-like’ replacement (Ravindra Jadeja) where Jadeja is considered a bowling all-rounder while Chahal is purely a leg-spinner.

Rules 1.2.7.3 – 1.2.7.5 sets out the guidelines for Match Referee to address the issue of concussion replacement. As per the Rules, the Match Referee should assess the likely role the concussed player would have played during the remainder of the match and the normal role, which would be performed by the nominated replacement. It is not necessary that a player should be a ‘like-for-like’ replacement in terms of ability and standing. Such an interpretation would render the concussion rules infructuous as no two players are alike and no team can be expected to carry a squad containing an exact substitute for each of its players. The assessment is to be done on the basis of the ‘likely role’ to be played.

Moreover, if the Match Referee believes that the inclusion of the replacement would excessively advantage the team, the Match Referee is well within his rights to impose conditions upon the identity and involvement of the Concussion replacement, to neutralize any advantage being accrued. In the instant match, being an all-rounder, Jadeja was likely to complete his bowling quota. Since the replacement happened at the end of the batting innings, Chahal could be considered a ‘like-for-like’ replacement, as he would have played the role of Jadeja, which is to bowl his quota of four overs.

Conclusion:

An in-depth analysis of the ICC Rules & Guidelines and the subject issue of concussion replacement do not hint at any unfair or mala-fide intention neither on the part of the Indian cricket team nor the match referee. Another perspective; had Chahal not bowled the Indian team to victory and bagged the man of the match award, this issue would not have seen the light of the day. The whole matter seems to be no more than a tempest in a teacup.

Image Credits: Photo by Aksh yadav on Unsplash

Had Chahal not bowled the Indian team to victory and bagged the man of the match award, this issue would not have seen the light of the day. The whole matter seems to be no more than a tempest in a teacup.

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Surrogate Advertising In India :Is CBFC Certification mandtory?

17 December, 2020
Sripriya Padmanabhan
Sidheswar Sahoo

We are all familiar with the quirky and satirical advertisements of ‘Men Will Be Men’ for Seagram’s Imperial Blue Superhits Music CDs. Needless to mention, the brand “Imperial Blue” is in fact a popular brand of Indian whisky, owned by Pernod Ricard and launched in the year 1997. Since Indian law prohibits advertisements that promote, directly or indirectly, the production, sale, or consumption of cigarettes, tobacco products, alcohol in India, these products are advertised through surrogate advertising or brand extension.

Time and again there have been numerous case laws, Court rulings, and Govt. notifications prohibiting/regulating the advertisement of these products in India. ASCI, the self-regulatory body of advertisements in India, has been playing a proactive role in this regard thereby keeping all these ads in check.

Evolution of Surrogate Advertising in India

In India, the Ministry of Information and Broadcasting (I&B), through The Cable Television Networks (Regulation) Act, 1995 (‘Act’) and The Cable Television Networks Rules, 1994 (‘Rules’) as well as other policies and guidelines issued from time to time, has been regulating content on private satellite channels, a network of multi-system operators, and local cable operators (LCOs).

Rule 7 of the Rules prescribes the advertising code which has to be conformed to by cable operators while broadcasting advertisements through their cable service. Rule 7(2) specifically enlists advertisements that cable operators would not be allowed to broadcast. Rule 7(2) prohibits advertisements that “promotes directly or indirectly production, sale or consumption of cigarettes, tobacco products, wine, alcohol, liquor or other intoxicants.”

A proviso to the above Rule was inserted through an amendment on August 9, 2006 [G.S.R. 469 (E)]¹, which permitted advertisements of products that use a brand name or logo, which is also used for cigarettes, tobacco products, wine, alcohol, liquor, or other intoxicants, subject to conditions that (i) the storyboard or visual of the advertisement must depict only the product being advertised and not the prohibited products in any form or manner; (ii) the advertisement must not make any direct or indirect reference to prohibited products; (iii) the advertisement must not contain any nuances or phrases promoting prohibited products; (iv) the advertisement must not use particular colours and layout or presentations associated with prohibited products; (v) the advertisement must not use situations typical for promotion of prohibited products when advertising the other products:

“Provided further that all such advertisement shall be previewed and certified by the Central Board of Film Certification (CBFC) suitable for unrestricted public exhibition prior to telecast or transmission or retransmission.”

Timeline of Various Orders by the Government Pertaining to Surrogate Advertising

A notification² issued by the Ministry of I & B on February 27, 2009, had stated that such ads found to be “genuine brand extensions” shall be previewed and certified by the CBFC.

Another directive³ that was issued on June 17, 2010, was quite blunt on the rules as it directed all TV channels to stop carrying any ad of a product that even used a brand name or logo used for wine, alcohol and liquor. According to this directive, it looks that even though any other product was being advertised, the ad will be prohibited if it contained the name of an “alcoholic beverage”

Recently, the Ministry of I & B on September 15, 2020, issued an advisory⁴ with a view to curb surrogate advertisements, saying that such ads are to be previewed and certified by the CBFC to ascertain whether they are suitable for unrestricted public exhibition and are in accordance with stipulated This is the latest order by the government in this regard.

Is the Advisory binding in nature?

The question which arises here is that whether such “advisories” issued by the Ministry of I & B are binding on the Court in the case of Kritika Padode v. Union of India & Anr.⁵ had established that an advisory is not a legally binding order. The court had mentioned that they were just “mere advice to the private satellite TV channels”.

Also, in the 2019 Allahabad High Court Judgement, Struggle Against Pain v. State of U.P.⁶ where the main issue pertained to “Surrogate Advertisement”, there was no mention of a CBFC certificate being

ASCI Code

Rule 7 sub-rule (9) was amended⁷ on August 2, 2006, which made the Advertising Standards Council of India (ASCI) Code compulsory for the regulation of television advertisements. The ASCI is however a self-regulating body for the advertising and primarily has the power to pull up an advertiser for any violations against the advertising code. The Code does not though explicitly mention the requirement of a CBFC certificate to advertise something “surrogate”.

The ASCI⁸ has provided guidelines for the qualification of brand extensions, which are:

The product or service should be registered with an appropriate government authority eg Central Value Added Tax (CENVAT)/ Value Added Tax (VAT)/ Food and Drug Administration (FDA)/ Food and Safety Standards Authority of India (FSSAI)/ Trade Marks Registry (TM).
The availability of the surrogate product in the market must be at least 10% of the leading brand’s market share as measured in metro cities where the product is being
The sales turnover of the product or service should exceed Rs 5 crore per annum pan-India or Rs 1 crore per annum per state where the distribution has been
A valid certificate must have been obtained from an independent organisation such as AC Nielsen or a category-specific industry association before

This has yet again been notified in a Press Release recently issued by ASCI on November 2, 20208. The Press Release reiterated that advertisements for brand extensions could not feature anything prohibited by law or that pertained to banned products nor could it refer to or hint at such products. The Press Release was issued to keep a check on advertisements that were being broadcasted during the IPL. Further, the IPL broadcaster also confirmed that all advertisements were checked for CBFC clearance so that they are not in violation of the Act.

The ASCI further sought responses from advertisers, within 7 days, to validate their claims of their product or service being a genuine brand extension, which included sales, distribution, and market share data certified by an independent body. The advertisement was to be allowed to continue only if it met the criteria for a genuine extension. However, if no response was received, then order would be passed ex-parte.

ASCI Rulings

The Consumer Complaints Council (CCC) set up by ASCI handles complaints pertaining to advertisements that come before the ASCI. On perusing complaints for the year 2019-2020, there were 12 rulings related to surrogate advertising and brand extensions. Based on the cases, it may be inferred that ASCI places emphasis on adherence to its Guidelines for Qualification of Brand Extension Product or Service.

Consumer Protection Act, Rules & Guidelines

The draft Central Consumer Protection Authority (Prevention of Misleading Advertisements and Necessary Due Diligence for Endorsement of Advertisements) Guidelines, 2020, was issued in August 2020, by the Central Consumer Protection Authority (CCPA) in the exercise of the powers conferred by clauses (c) and (d) of sub-section (1) of section 18, read with clause (l) of sub-section

(2) of section 18 of the Consumer Protection Act, 2019 (Act 35 of 2019) (CPA).

The draft guidelines have been framed for the prevention of false or misleading advertisements as well as due diligence to be carried out for endorsements. Hence, the scope of the guidelines pertains to all advertising/ marketing communications regardless of form, format, or medium and apply to manufacturers/service providers whose products/services are the subject of the advertising/marketing communications, as well as to advertisement agency and endorser (wherever applicable) of the product/service⁹.

The draft guidelines under Rule 8 have also included Surrogate Advertising. Further, the guidelines state that the provisions of the CPA would apply for any violations of the provisions of the guidelines. Hence, we can gather that should there be any contraventions to the guidelines once it is notified, the CPA would have the power to impose penalties on the manufacturers or endorsers.

Conclusion

It may be noted from the Cable TV Act & Rules that the amendment was made to permit surrogate advertisements for genuine brand extensions, but solely with such advertisements being compliant with the requirements provided therein and in the ASCI Code. Hence, one such prerequisite is that the advertiser needs to obtain a certificate from the Central Board of Film Certification (CBFC) for such advertisements to be allowed on the cable service. This has again been reiterated in several notifications issued by the Ministry of I & B and ASCI.

From the above rulings and the press release, it can be gathered that ASCI has come down heavily on advertisements for even the slightest of references to banned products (such as alcohol and the like) in their surrogate advertisements. Hence, adhering to such requirements provided in the Rules, Code and other related guidelines/notifications issued from time to time may be the way to ensure that such advertisements are displayed to the public. The ASCI being a self-regulatory body has no powers to penalize the advertisers and may only have them modify or remove their advertisements should they not comply with their Code. However, under the draft guidelines issued by CCPA, which has defined surrogate advertisements, directions could be issued, and penalties could be imposed against false or misleading advertisements by manufacturers/endorsers. Based on this, we would have to wait and watch on how both bodies would work together or if the powers of the ASCI for false and misleading advertisements would decrease.

References

¹ https://mib.gov.in/sites/default/files/cab2.pdf

² https://mib.gov.in/sites/default/files/cab4.pdf

³ http://www.rctfi.org/notification/directive.pdf

⁴https://mib.gov.in/sites/default/files/ADVISORY%20ON%20SURROGATE%20ADVERTISEMENTS.pdf

⁵ 2016 SCC OnLine Del 4360

⁶2019 SCC OnLine All 4624

⁷ https://www.ibfindia.com/sites/default/files/cab1.pdf

8 https://www.ascionline.org/images/pdf/pr_surrogate_advertising_2nd_november_2020.pdf

⁹https://consumeraffairs.nic.in/sites/default/files/file-uploads/latestnews/Draft%20guidelines%20for%20stakeholders%20consultation.pdf

Image Credits: Photo by Mohammad Shahhosseini on Unsplash

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The Rise of Fantasy Sports in India

02 December, 2020
Santosh Vikram Singh

“Dream XI mein team bana lo”! Every Indian cricket fan must have heard this line several times during the recently concluded IPL 2020. From a struggling startup that faced uncertainty about the legality of its business model to the title sponsor of IPL 2020, Dream11, an Indian Fantasy Sports platform has made it big. With the rise of the likes of Dream11 and Mobile Premier League (MPL) the market for fantasy sports has surely been set in India.

What are Fantasy Sports?

Fantasy Sports¹ are online prediction games where the fantasy gamers (persons playing the game) put together a virtual team of real sports players such as players from the Indian Premier League (IPL), English Premier League (EPL) the National Basketball Association (NBA), etc. These gamers are called “Managers” and they form a team of players in a specific league, who earn points based on real-life statistics that are converted into fantasy points. Managers earn fantasy points based on the players’ performances in real-life sports. Each Manager plays against other Managers and their teams. These managers manage a roster by adding, trading, and selling players to form their team.

There are two types of fantasy sports that are prevalent. The first is the season-long draft system and the second one is the daily fantasy leagues played by the players worldwide.

In Indian fantasy sports platforms like Dream11, My Circle 11 we generally see the daily fantasy version being used. Managers pay an entry fee to enter a contest, the prize money for which is predetermined by the platform. Taking the example of cricket; points are earned on a variety of statistics like the runs scored by a batsman, wickets taken by a bowler and catches/run-outs inflicted by a fielder. The managers have to select a captain and vice-captain among the 11 players and their performance normally fetches some extra points. At the end of the match, the Manager with the highest points wins the game.

Prominent Fantasy platforms in India

There have been many fantasy sports platforms in the offing in India, but it was Dream11 that made it big and popularised fantasy sports in India. Some of the other apps such as MPL, My11 Circle, My team 11, Fancode, Fancy11, Faboom, Fanfight, Guru 11, MPL, Balle Baazi are fighting out in the market which already is in surge with the number of new players joining in. Dream 11 has been the first Fantasy Sports platform that has entered the league of unicorns in India. They have also been at the forefront when it comes to legal suits as many cases have been filed against it and some are still pending.

How does ‘Fantasy Sports” work in India

The Federation of Indian Fantasy Sports (FIFS)² is the self-regulatory industry body of Fantasy sports in India. FIFS has been set up to protect consumer interest and formulate best practices for Fantasy Sports

For an online fantasy sports platform (OFSP) to be considered for confirmation by the Governing Council, the Operator is required to obtain and submit an evaluation and opinion from the Innovation Committee of the FIFS on the proposed contest as a ‘game of skill’. In the recent Rajasthan High Court ruling⁴, the Court observed that FIFS presently has over 35 of the largest fantasy sports companies as members, which cater to 99% of the fantasy sports users in India.in India. FIFS also publishes a Charter for Online Fantasy Sports Platforms which lays down the ground rules for the members.³

According to the charter, the members have to obtain a valid license and authorization for the usage of third-party intellectual property rights which include player images, photographs, trademarks, etc. on its platform. Members have to obtain a license and authorization to claim any official association with any sport’s governing body, player, team or tournament. FIFS has also adopted the Internet & Mobile Association of India (IAMAI) guidelines for self-regulation of the advertisements.⁵

Legal issues around online gaming in India

Regulating Fantasy Sports: Central vs State Legislations

The Public Gaming Act, 1867⁶ is a central law that prohibits running or being in charge of a public gambling house in India. However, under the Constitution of India, State legislatures have been entrusted with the power to frame state-specific laws on betting and gambling. As per the Seventh Schedule to the Constitution of India7 (Entries 34 and 62 of List II), the State Governments have been authorized to make laws on betting and gambling.

Fantasy Sports, which have been categorized as Game of skill, fall in a separate category and the State Gambling legislation of various states (with the exception of Assam, Odisha and Telangana) exclude game of skill from the ambit of gambling.

“Skill” V. “Chance”

The main legal hurdle faced by online gaming companies in India is whether it is a game of skill or a game of chance. Countries have adopted different approaches to defining chance and skill. India has followed the US model by applying the “dominant factor” test. The Satyanarayana case⁸ and the Lakshmanan case⁹ were the first cases where the “skill versus chance” question was addressed. The Courts were of the opinion that no game exists which can have ‘skill’ as the individual factor to determine the result. In State of Bombay v. R.M.D.C.,¹⁰ the court propounded that if a game contains both elements, i.e. skill and chance, it would be considered a game of skill.

Skill vs. Chance as seen through Fantasy Sports

Bringing context into fantasy sports, the main question was whether choosing a team of 11 players out of 22 was something a player did on skill or whether it was the player taking chance by selecting the set of players. The Court for the first time had settled this question in the case of Varun Gumber v. UT of Chandigarh & Ors.¹¹ clarified that: “Playing of fantasy game by any participant user involved forming of a virtual team by him which certainly required considerable skill, judgment and discretion. The participant had to assess the relative worth of each athlete/sportsperson as against all athlete/sportspersons available for selection. He was further required to study the rules and regulations of the strength of athlete or player and weakness also.”

The High Court made its stance clear that Dream 11 is completely a game of skill and held that fantasy sports did not amount to gambling. The Court also added that Dream 11 was conducting a business activity protected under Article 19(1)(g) of the Constitution.

IP Rights: Use of Players’ Names, Team Logos, etc.

Another issue that surrounds fantasy sports platforms is the usage of the players’ names and the team logos in their platforms. Fantasy sports platforms use players’ names, team logos etc. to enable the participants to choose specific players from specific teams. We are aware of the fact that IP laws enable players to have certain IP rights including image rights.

Fantasy sports are built around the leagues/ tournaments and the participants (players) therein and not around specific players and there are always commercial arrangements between the platforms and the leagues/teams which enables the platforms to use their IP. Moreover, the use of these players’ names and images by fantasy sports platforms is largely for the purpose of identifying those players and the use of their names, images do not in any manner suggest endorsement of the fantasy sports game.¹²

Since Indian courts haven’t particularly dealt with cases of publicity rights with regard to fantasy sports, there is less legal jurisprudence available on this issue.

Judicial Developments related to “Fantasy Sports” in India

Two years after the Varun Gumber case, the legality of Dream 11 was questioned again in the Bombay High Court in the case of Gurdeep Singh Sachar v. Union of India case¹³. The Court again sided with the previous judgment and observed- “The participants do not bet on the outcome of the match and merely play a role akin to that of selectors in selecting the team. The points are scored by the participants for the entire duration of the whole match and not any part of the match.” This was an interesting analysis done by the Bombay High Court which further strengthened Dream 11’s case. Dream 11 again got the benefit of the doubt in 2020 where the Rajasthan High Court dismissed the PIL¹⁴ which argued that the said app was involved in betting on cricket games.

Future of Fantasy Sports in India! What lies ahead?

Recently in D Siluvai Venance v. State,¹⁵ the Madras High Court has called for stricter regulations for online games. The Court showed concern by pointing out how youngsters are being attracted to play such online games where some prize money is involved. The Madras High Court also sent a notice to MPL ambassador Virat Kohli and My11Circle ambassador Sourav Ganguly for promoting online gaming apps. It is worth noting that the apps mentioned above not only include fantasy sports but they also have online rummy- which was the major point of contention in the Siluvai case.

Andhra Pradesh was the latest state to ban fantasy sports in its entirety when the savings and exceptions for ‘game of skill’ from the provisions of the Andhra Pradesh Gaming Act were done away with.

The decision of the Bombay High Court has been challenged before the Supreme Court already. The Supreme Court has issued notices to all the parties for hearing the fresh contentions. So, it can be said that the future of online fantasy sports hangs in the balance until the Supreme Court decides on the pending matter.

References

¹ https://fanarena.com/fantasy-sports/

² https://fifs.in/

³ https://fifs.in/wp-content/uploads/2020/09/1598963962796_FIFS.Charter.wef-01Sep2020.pdf

⁴https://www.medianama.com/wp-content/uploads/Rajasthan-High-Court-Dream-11-2020-Ravindra-Singh-³ https://fifs.in/wp-content/uploads/2020/09/1598963962796_FIFS.Charter.wef-01Sep2020.pdf

Chaudhary-v.-Union-of-India.pdf

⁵ https://fifs.in/fifs-advertising-guidelines/

⁶ https://www.indiacode.nic.in/bitstream/123456789/2269/1/A1867-03.pdf

⁷ http://legislative.gov.in/sites/default/files/COI-updated.pdf

⁸ State of Andhra Pradesh v. K. Satyanarayana, AIR 1968 SC 825

⁹ Dr. K.R. Lakshmanan v. State of Tamil Nadu, AIR 1996 SC 1153

¹⁰ State of Bombay v. R.M.D. Chamarbaugwala, AIR 1957 SC 699