The Directorate General of Goods and Services Tax Intelligence (DGGI) has intensified its enforcement actions against offshore online gaming entities. The online money gaming industry comprises both domestic and foreign operators.

Under the GST law, ‘Online Money Gaming’, an actionable claim, is classified as a supply of ‘Goods’ and subject to a 28% tax. Entities operating in this sector are required to register under GST.

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Around 700 offshore entities involved in the supply of online money gaming/betting/gambling are under DGGI’s scanner, the Ministry of Finance said on Saturday.

It has been noticed that these entities are evading GST by failing to register, concealing taxable pay-ins, and bypassing tax obligations. So far, 357 websites/URLs of illegal/non-compliant offshore online money gaming entities have been blocked by the DGGI, in coordination with the Ministry of Electronics and Information Technology (MeitY), under Section 69 of IT Act, 2000.

In a recent operation against some of the illegal gaming platforms, the DGGI targeted and blocked bank accounts that were being used to collect money from participants, attaching nearly 2,000 bank accounts and Rs. 4 crore, in coordination with the I4C and the National Payments Corporation of India (NPCI).

In another action, 392 bank accounts linked to UPI IDs found on the websites of some of these offshore entities have been put on debit freeze and a sum totaling Rs. 122.05 crore has been provisionally attached in these accounts.

Another operation against a few Indian nationals, who were running Online Money Gaming Platforms from outside India, was conducted by the DGGI. It revealed that these individuals were facilitating online money gaming to Indian customers through various such online platforms including Satguru Online Money Gaming Platform, Mahakaal Online Money Gaming Platform and Abhi247 Online Money Gaming Platform and are using mule bank accounts to collect money from Indian customers.

The DGGI has so far blocked 166 mule accounts linked with these platforms. Three such persons have been arrested till now and an investigation against more such individuals is under progress.

Non-compliance by foreign entities distorts fair competition, harms local businesses, and skews the market. These unscrupulous foreign entities circumvent restrictions by creating new web addresses. Investigations also revealed that these companies operated through ‘mule’ bank accounts to process transactions.

Funds collected through mule accounts leave the potential to be funneled into illicit activities which may also be dangerous for the national security point of view.

It has been observed that many Bollywood celebrities and cricketers along with YouTube, WhatsApp, and Instagram influencers, are found endorsing these platforms, and, therefore, the public is advised to remain cautious and not engage with offshore online money gaming platforms as it may jeopardise their finances and indirectly support activities that undermine financial integrity and national security.