The DGGI now has the power to directly target offshore online money gaming platforms evading GST payments. With an estimated ₹81,875 crore in GST evasion reported, the government aims to crackdown on the sector by authorizing the DGGI to issue takedown notices without relying on the IT Ministry.
By PC Bureau
The Directorate General of GST Intelligence (DGGI) can now directly issue takedown notices to intermediaries, blocking online gaming apps and websites that evade Goods and Services Tax (GST). This move comes under Section 79(3)(b) of the Information Technology Act, as outlined in a government notification on Monday.
The notification designates the Additional/Joint Director (Intelligence) at DGGI headquarters as the nodal officer responsible for enforcing this measure. It follows the provisions of the Information Technology (Guidelines for Intermediaries and Digital Media Ethics Code) Rules, 2021.
Under the Integrated Goods and Services Tax (IGST) Act, offshore online money gaming companies operating in India are required to register and pay GST. Non-compliance can lead to the blocking of their websites under Section 69A of the Information Technology Act, with the IT Ministry involved in routing blocking orders. However, the DGGI can now issue direct takedown notices without needing the Ministry’s intervention.
Online money gaming, including both skill and chance games, attracts 28% GST on the total deposits made by players. Many of these platforms, based in tax havens like Curacao and Malta, have been flagged for evading significant tax amounts. In its FY24 report, DGGI identified online money gaming as a “high-risk” sector, with ₹81,875 crore evaded in GST across 78 cases, marking the highest tax evasion in any sector.
As of December, 642 offshore entities have been flagged for investigation by the DGGI.
