goods and service tax
The Directorate General of Goods and Services Tax Intelligence (DGGI) has ramped up its efforts against offshore online money gaming entities to prevent tax evasion. Approximately 700 offshore operators engaged in gaming, betting, and gambling activities are currently under investigation for evading the Goods and Services Tax (GST) by failing to register, concealing taxable pay-ins, and circumventing tax regulations.
In collaboration with the Ministry of Electronics and Information Technology (MeitY), the DGGI has blocked 357 illegal gaming websites under Section 69 of the IT Act, 2000. Additionally, nearly 2,400 bank accounts used for fund collection have been frozen, with provisional attachments amounting to Rs. 126 crore. The investigations have highlighted the use of “mule” accounts for transactions, posing risks to financial integrity and national security.
Several Indian nationals operating these platforms from abroad have been arrested, and 166 mule accounts associated with platforms such as Satguru, Mahakaal, and Abhi247 have been blocked. The public is strongly advised against engaging with these platforms, especially since they frequently use endorsements from celebrities and influencers for promotion, which can lead to significant financial risks.
The DGGI underscores the necessity for responsible gaming on regulated platforms, planning stricter actions coinciding with major events like the Indian Premier League (IPL) to address illicit gaming activities. This crackdown aims to protect the economy, promote fair competition, and safeguard national interests.
Under GST law, ‘Online Money Gaming’ is classified as a supply of ‘Goods’ and is subject to a 28% tax. Entities involved in this sector must comply with registration under GST. DGGI’s investigations revealed that numerous offshore entities escape compliance, adversely affecting local businesses and market fairness.
DGGI remains dedicated to combating illegal offshore gaming entities. With the IPL season approaching, enforcement actions are poised to increase in order to tackle illicit operations effectively. Staying informed about the legality of gaming platforms and opting for regulated options is vital for ensuring responsible gaming practices.