The Directorate General of Goods and Services Tax Intelligence (DGGI) has ramped up its efforts to tackle offshore online gaming entities evading taxation in India. This intensified crackdown is aimed at safeguarding local businesses, ensuring fair market competition, and preserving the nation’s financial integrity. The online money gaming industry, which encompasses both domestic and foreign operators, has come under the scrutiny of DGGI due to widespread non-compliance with Goods and Services Tax (GST) regulations.
Under GST law, online money gaming is categorized as a supply of goods, being an actionable claim, and is subjected to a 28% tax. All entities operating within this sector are mandated to register under GST. However, DGGI’s investigations revealed that numerous offshore entities have been evading these tax obligations by failing to register, concealing taxable pay-ins, and bypassing required compliance protocols. Nearly 700 offshore operators are currently under investigation for such violations.
In coordination with the Ministry of Electronics and Information Technology (MeitY), DGGI has blocked 357 websites and URLs of illegal offshore gaming entities under Section 69 of the IT Act, 2000. These actions underscore the government’s commitment to curbing illegal activities that could potentially distort the gaming market and harm local businesses.
A major operation led by DGGI targeted the financial mechanisms employed by these entities. Nearly 2,400 bank accounts have been blocked, and funds amounting to Rs. 126 million have been frozen. Among these, 2,000 bank accounts used to collect money from participants were blocked, and Rs. 4 million was attached with the support of I4C and the National Payments Corporation of India (NPCI). In another action, 392 bank accounts linked to UPI IDs found on the websites of offshore gaming platforms were put on debit freeze, with Rs. 122.05 million provisionally attached.
Additionally, DGGI uncovered operations by Indian nationals running offshore online gaming platforms targeting Indian customers. Platforms such as Satguru Online Money Gaming Platform, Mahakaal Online Money Gaming Platform, and Abhi247 Online Money Gaming Platform were found to be using mule bank accounts to collect funds. So far, 166 such mule accounts have been blocked, and three individuals linked to these platforms have been arrested. Investigations are ongoing to identify further individuals involved in these operations.
The modus operandi of these foreign gaming companies often involves circumventing restrictions by creating new web addresses and using mule bank accounts for transactions. This not only disrupts fair market practices but also poses potential risks to national security, as funds collected through these accounts could be funneled into illicit activities.
Public figures, including Bollywood celebrities, cricketers, and social media influencers on platforms like YouTube, WhatsApp, and Instagram, have been found endorsing these illegal platforms. This trend has prompted DGGI to issue advisories urging the public to avoid engaging with offshore online gaming platforms to protect their personal finances and avoid indirectly supporting activities that undermine financial integrity and national security.
With the Indian Premier League (IPL) season approaching, DGGI is prepared to implement more stringent enforcement measures to curb illicit gaming operations. The agency’s actions highlight the importance of choosing regulated platforms for responsible gaming and protecting the integrity of the nation’s financial systems.
This comprehensive crackdown reflects DGGI’s unwavering commitment to addressing the challenges posed by illegal offshore gaming entities. By disrupting their operations, freezing financial channels, and holding violators accountable, the agency is sending a clear message that non-compliance will not be tolerated. The success of these measures is not only a step towards a level playing field for domestic businesses but also a crucial effort to maintain the nation’s economic security and uphold the principles of fair market competition.
