The Directorate General of GST Intelligence (DGGI) has urged for increased scrutiny of online gaming platforms, citing concerns over potential tax evasion and money laundering risks. According to news agency PTI, an inter-departmental committee with representatives from the Enforcement Directorate (ED), Reserve Bank of India (RBI), tax, and consumer affairs departments may be set up. According to a DGGI report, the committee will work to combat the proliferation of online gaming platforms and ensure regulatory compliance.
The DGGI annual report for 2023-24 has flagged that ‘online money gaming’ is a “high-risk” industry for tax evasion, money laundering, cyber fraud, juvenile delinquency, and various socio-economic issues.
CBIC issues notice to gaming companies
The report further states that the GST intelligence wing of the Central Board of Indirect Taxes and Customs (CBIC) has initiated action against 118 domestic online gaming entities. CBIC, it says has sent Show Cause Notices to 34 taxpayers involving a tax amount of Rs 1,10,531.9 crore. These notices were issued to these gaming firms for failing to pay the mandated 28% Goods and Services Tax (GST) rate.
Additionally, DGGI recently identified 658 offshore entities operating without proper registration or compliance, all of which are now under investigation. As part of these efforts to enforce regulations, authorities have also recommended blocking 167 URLs and websites associated with non-compliant gaming operations.
