Taxscan: DGGI takes down 357 online money gaming sites for tax evasion
The Directorate General of Goods and Services Tax Intelligence (DGGI) has initiated a significant crackdown on offshore online money gaming entities evading taxes, taking action against 357 websites and URLs that are operating illegally in India. This move, carried out in collaboration with the Ministry of Electronics and Information Technology (MeitY) under Section 69 of the Information Technology Act, 2000, is part of a larger investigation aimed at 700 offshore gaming platforms that are evading the 28% Goods and Services Tax (GST) applicable to such activities.
The popularity of online gaming platforms surges during events like the Indian Premier League (IPL) and Indian Super League (ISL), attracting millions of users who engage in betting with hopes of high returns. An investigation into these platforms revealed that many of them do not register under GST, hide taxable pay-ins, and avoid fulfilling national tax obligations. This behavior not only creates an unfair competitive environment but also raises concerns about financial integrity.
To combat this issue, DGGI has partnered with the Indian Cyber Crime Coordination Centre (I4C) and the National Payments Corporation of India (NPCI) to launch a targeted operation against illegal gaming platforms. As a result, 2,000 bank accounts have been blocked, freezing ₹4 crore associated with online gaming transactions. Additionally, 392 bank accounts linked to Unified Payments Interface (UPI) IDs have been put on debit freeze, with ₹122.05 crore provisionally attached in these frozen accounts. Furthermore, three individuals involved in running offshore gaming platforms catering to Indian users have been arrested in connection with this crackdown.
Investigations have revealed that platforms like Satguru Online Money Gaming Platform, Mahakaal Online Money Gaming Platform, and Abhi247 Online Money Gaming Platform utilized these accounts to facilitate illicit transactions. These fraudulent entities often change web addresses to evade detection and continue their activities, making enforcement efforts challenging and posing significant risks to national security.
Authorities have issued a warning to the public, urging caution against engaging with unregulated gaming platforms that can have lasting financial repercussions. It is essential for individuals to be vigilant and avoid participating in activities that could potentially lead to negative financial consequences.
The crackdown on offshore online money gaming entities by DGGI marks a crucial step in addressing tax evasion in the gaming industry, ensuring compliance with GST regulations, and safeguarding the financial interests of the country. Going forward, stringent measures will continue to be implemented to combat illegal gaming activities and uphold financial integrity.
