Govt Probing 642 Overseas Gambling Platforms For Tax Evasion

SUMMARY

MoS Pankaj Chaudhary said that 642 offshore entities providing online money gaming/ betting/ gambling have been identified till date for investigation for potential tax evasion

The MoS added that MeitY has been asked to block the offshore online gaming entities which have been found non-responsive and noncooperative during investigation

Earlier this year, industry body AIGF’s CEO Roland Landers said that offshore illegal betting platforms are costing the national exchequer $2.5 Bn in GST revenue every year

The Centre is probing 642 offshore gaming, betting, and gambling entities for potential tax evasion, Minister of State (MoS) for finance Pankaj Chaudhary told the Parliament.

In a written response in the Lok Sabha, Chaudhary also said that the finance ministry is working with the electronics and IT ministry (MeitY) to block such websites.

“642 offshore entities providing online money gaming/ betting/ gambling have been identified till date for investigation… The offshore online gaming entities which have been found non-responsive and noncooperative during investigation, have been informed to MeitY for blocking their websites/URLs as per provisions of Section 14A(3) of the IGST Act, 2017,” said Chaudhary.

The minister was responding to a question by DMK MP Selvaganapathi TM, who sought to understand if the Centre has any reciprocal arrangements with foreign governments for sharing information on tax evasion by such entities. To this, the MoS finance said that there are no such arrangements.

It is pertinent to note that industry body All India Gaming Federation’s (AIGF’s) CEO Roland Landers, earlier this year, said that offshore illegal betting platforms are costing the national exchequer a mammoth $2.5 Bn in goods and services tax (GST) revenue every year.

Under the current rules, all offshore online gaming companies, whether offering games of chance or skill, operating in the country are required by law to set up a subsidiary in India or appoint a representative to pay tax on funds collected from customers.

All gaming platforms in the country have to pay a 28% GST on full face value of bets for real money gaming.

The 28% GST regime came into effect on October 1 last year. Many industry players and stakeholders said that the new regime would adversely impact the homegrown online gaming industry and sought the rollback of the move.

However, the Centre stuck to its guns. In the six months (October 2023 to March 2024) after the new regime came into effect, collections from online gaming entities soared 412% year-on-year (YoY) to INR 6,909 Cr.