After finding tax evasion, the tax department is working on ways to tackle the menace
Many offshore entities which provide betting and gambling services are not registered under GST law and subsequently these companies are not paying taxes
It is difficult to serve notices to such platforms due to the fact that these entities do not have a permanent establishment or a physical presence in India
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Tax evasion by offshore betting and gambling platforms has once again been brought under scrutiny. The platforms were found to be evading goods and services tax (GST) law by tax officers.
In addition, the tax department is working on ways to tackle GST evasion, news agency PTI reported.
Many offshore entities which provide betting and gambling services are not registered under GST law and subsequently these companies evading taxes.
“Although several overseas educational bodies offering online courses in India are registered as OIDAR, the entities providing online gaming, betting ad gambling platforms are not registered under GST. We are pursuing such cases and hope to bring them under the GST net,” according to a source quoted by PTI.
Despite not being registered under required law, betting and gambling apps are available on Google Play Store and App Store for free download.
Although these companies are obligated to pay GST for their operations and transactions within the country, it is challenging to issue notices to them as they lack a fixed establishment or physical footprint in India.
Moreover, it has been discovered that a significant number of these companies regularly alter their offshore bank accounts, making it arduous to track and locate them.
This comes to light a time when the Ministry of Electronics and Information Technology prohibited online gambling and betting platforms.
Earlier this month, the Directorate General of GST Intelligence (DGGI) issued notices to as many as 38 such platforms for allegedly laundering money and syphoning off taxes.
These platforms have come under scanner multiple times for tax evasion.The Enforcement Directorate (ED) also seized INR 212.91 Cr till December 2022 in connection with money laundering probes involving online gambling platforms.
In February, the Indian government banned 138 chinese betting apps as the apps in question were flouting Section 69 of the IT Act. The Centre also directed Google to stop overseas online betting platforms, such as Betway and 1xBet, from marketing their ads in the country late last year.
The Ministry of Information and Broadcasting (MIB) also advised media entities, media platforms and online advertisement intermediaries to refrain from carrying advertisements/promotional content of betting platforms earlier this month.
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