DGCI Orders Block on Six Gaming Sites Over Rs Tax Evasion, IGST Violations
- Six gaming sites flagged for operating without registration and evading IGST.
- Take-down notice to Google citing 'security of the state' and 36-hour block directive.
- 28% GST on full bet value continues to stir debate in the gaming industry.
The Director General of GST Intelligence (DGCI), under the Department of Revenue, has issued a take-down notice to Google, flagging six online gaming and gambling platforms for allegedly operating without registration in India and failing to pay Integrated Goods and Services Tax (IGST).
The flagged platforms include MGM91.com, Shakunimama.com, Khelomama.com, 247majestic.com, Redgames1.com, and karabet.in. A review of these websites reveals that they offer a range of games, including both games of skill and games of chance, such as online roulette, teen patti, blackjack, and more.
The notices, issued on August 1, invoke provisions under Section 79(3)(b) of the Information Technology Act, read with Section 3(1)(d) of the IT Rules, 2021, and Section 14A(3) of the IGST Act, 2017. The DGCI cited 'security of the state' as one of the reasons for flagging these platforms.
According to a copy of the notice reviewed by Moneycontrol, DGCI’s investigation concluded that these platforms have been offering 'online money gaming services' to Indian citizens and are thus liable to pay IGST under Section 14(a)(1) of the IGST Act, 2017. The authority alleges that the entities have failed to pay the applicable tax.
Further, the DGCI pointed out that the platforms operate through their websites and mobile applications (Android/iOS), and accept payments via UPI, digital wallets, net banking, and other modes. As they have not registered in India or fulfilled their tax obligations, the DGCI directed that access to these websites be blocked within 36 hours of receiving the notice.
However, as of August 10, Moneycontrol was able to access the websites. The publication reached out to Google and the DGCI for comments but had not received a response at the time of reporting. Attempts to contact the gaming platforms also remained unsuccessful.
The action comes amid a broader tax debate over online gaming. On August 5, the Centre told the Supreme Court that for taxation purposes in online gaming, the entire stake amount or the full face value of the bet should be considered, regardless of whether it’s a game of skill or chance.
In October 2023, the government clarified that a 28% GST applies to the full-face value of bets. This shift significantly raised the tax burden compared to the earlier system and has been a contentious issue for the gaming industry ever since.
