An inter-departmental committee setup by the government will combat the proliferation of online gaming platforms and ensure regulatory compliance
As per the DGGI report, inter-departmental committee with representatives from ED, RBI, tax and consumer affairs departments will examine the same.
It highlighted that the GST intelligence wing of the Central Board of Indirect Taxes and Customs (CBIC) has initiated action against 118 domestic online gaming entities, and Show Cause Notices have been issued to 34 taxpayers involving tax amount of Rs 1,10,531.91 crore.
The notices were issued to these gaming companies as they were not paying GST at 28 per cent rate.
The DGGI annual report 2023-24 flagged that online money gaming’ is a “high-risk” industry for tax evasion, money laundering, cyber frauds, juvenile delinquency and various socio-economic evils.
It said 658 offshore entities have been identified as non- registered/non-compliant entities and are being investigated by the DGGI. Also, 167 URL/websites have been recommended for blocking.
There are online gaming platforms which keep on changing their URL/website/apps to avoid tax compliance. Use of dark web or VPN based platforms for such supply further accentuates the difficulties in tax law enforcement, the DGGI said.
“Therefore, a multi-prolonged approach to deal with this sector is need of the hour. An Inter-department committee comprising CBIC, CBDT, ED, MeITY, MCA, MIB, RBI, Department of Consumer Affairs, and the like along with industry bodies may be set up to develop comprehensive strategies and regulations to combat the proliferation of such platforms, ensuring regulatory compliance, consumer protection and national security,” it added.
“Sir William Raynell Anson, a renowned British jurist, has defined a wager or bet as ‘a promise to give money or money’s worth upon the determination or ascertainment of an uncertain event’. The Hon’ble Supreme Court’s verdict on the matter shall have a significant impact on how the concept of online money gaming is understood,” the DGGI said.
Creating awareness and education among digital nagriks about safe and responsible gaming practices, promoting the use of legitimate platforms registered with MeitY or verified as permissible Real Money Gaming Platforms under the IT Rules, 2021, and entering into reciprocal arrangements with foreign governments for information sharing and tax enforcement may go a long way in effecting regulatory compliance in this industry, the DGGI said.