DGGI: ‘Gaming companies’ websites should be blocked’, GST Directorate General of Intelligence suggested to stop tax evasion

New Delhi| GST investigation body DGGI has suggested blocking the websites of these companies with information sharing and enforcement measures to prevent tax evasion in services like online gaming, online education and advertising. For this, mutual arrangements will have to be made with foreign governments.

This strictness against companies providing online gaming, education and advertising services is also necessary because the Directorate General of GST Intelligence (DGGI) has come to know that apart from online casinos located in tax haven countries, some companies are operating through foreign VPNs and cloud based platforms. Have been. These companies are committing tax evasion in various ways.

DGGI says that the attitude of these companies is not cooperative. For tax evasion, these companies deliberately avoid compliance with the rules, on which it is necessary to take action. In such a situation, exchanging information about these companies with global law enforcement agencies will help in curbing any tax evasion.

DGGI said in its annual report, GST collection becomes a big challenge due to OIDAR service providers being located abroad, even though it has immense revenue potential. At present 574 foreign companies offering OIDAR services have registered with the GST Department. Annual revenue from the sector has increased to Rs 2,675 crore in 2023-24, up from just Rs 80 crore in 2017-18.

Online Information and Database Access or Retrieval (OIDAR) services include those services which are distributed over the Internet or electronic networks and whose supply is not possible without information technology. These include a range of services such as cloud services, digital content, online gaming and online advertising. If such services are provided by a foreign entity to a non-taxable recipient, the supplier is liable to obtain registration and pay GST thereon.

DGGI has detected 6,084 cases involving GST evasion of Rs 2.01 lakh crore in 2023-24. This amount is double the GST evasion of Rs 1.01 lakh crore caught in 4,872 cases during 2022-23. The maximum tax evasion of Rs 81,875 crore was found in 78 cases in the online gaming sector during 2023-24, DGGI said in the report. Subsequently, tax evasion of Rs 18,961 crore was detected in 171 cases in the banking, financial services and insurance (BFSI) sector. 46 per cent of GST evasion cases are linked to non-payment of taxes. 20 per cent of cases relate to fraudulent input tax credits.