Online gaming

EXCLUSIVE: After GST, income tax probes online gambling companies

The net is closing in on offshore online gaming platforms that could escape the long arms of the Indian tax authorities. Sources told Business Today TV that the Central Board of Direct Taxes (CBDT) is consolidating its plans to tackle the issue.

“We have observed that many offshore applications generate huge business, but the corresponding amount of tax is not paid. We are looking into this,” a finance ministry official said.

The Income Tax Department collects data on possible tax evasion by online gambling companies. Recently, the Bengaluru wing of the GST intelligence wing had issued a show cause notice to the online gaming company Games Kraft Technology Pvt Ltd for an alleged evasion of Rs 21,000 crore.

Sources add that the income tax department could hunt a much higher amount – Rs 60,000 crore – of alleged tax evasion by online gambling platforms.

To this end, the tax authorities are working closely with the Ministry of Electronics, Information and Technology to restrict certain online gaming applications.

The government is also working on setting up a separate regulatory body and mandatory registration of online gambling start-ups to maintain a compliance-based registration system in the future.

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