The Indian government has given the Directorate General of GST Intelligence Headquarter (DGGI-HQ) the authority to direct intermediaries to block websites of online gaming companies suspected of tax evasion. A recent gazette notification from the Ministry of Finance revealed that the Additional/Joint Director (Intelligence) has been designated as the responsible officer for executing this action.
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Under the provisions of the Integrated Goods and Services Tax Act, 2017, specifically section 14A(3), the DGGI-HQ now has the power to block any online platform that is suspected of tax evasion, including those based outside India. The government has also invoked the Information Technology Act, specifically section 79, which holds intermediaries accountable for not taking action to remove or block such websites when ordered.
This move signals the government’s intention to crack down on foreign gaming platforms avoiding taxes by instructing intermediaries, such as search engines and social media platforms, to halt their online presence in India.
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The DGGI had earlier identified the online real money gaming industry as the largest contributor to GST evasion in FY 2023-24, with Rs. 81,875 crore in unpaid taxes across 78 cases. The government had also raised the GST on real money gaming from 18% to 28% earlier this year, removing the distinction between gaming and gambling.
