The Directorate General of Goods and Services Tax Intelligence (DGGI) has intensified its enforcement actions against offshore online gaming entities according to a government release., The action comes as part of a broader effort to tackle illegal and non-compliant operations in the online money gaming sector.
These entities, both domestic and foreign, are accused of evading Goods and Services Tax (GST) obligations, leading to significant losses in tax revenue.
Action against illegal entities
Under current GST law, online money gaming is classified as an actionable claim, which is subject to a 28% tax. Entities operating in this space are required to register under GST. However, DGGI has identified over 700 offshore entities involved in online gaming, betting, and gambling that are bypassing tax regulations, failing to register, and concealing taxable pay-ins.
As part of its enforcement efforts, DGGI has successfully blocked 357 websites and URLs of illegal gaming platforms in coordination with the Ministry of Electronics and Information Technology (MeitY), under Section 69 of the IT Act, 2000.
In a recent operation, the agency targeted and froze nearly 2,000 bank accounts associated with these illegal entities, seizing Rs. 4 crore in the process. Additionally, 392 bank accounts linked to UPI IDs used by these offshore operators have been placed on debit freeze, with a total of Rs. 122.05 crore provisionally attached.
Action on Indian nationals
The DGGI also uncovered several Indian nationals running online gaming platforms from abroad, such as the Satguru, Mahakaal, and Abhi247 platforms. These individuals used mule bank accounts to collect funds from Indian customers. So far, 166 mule accounts have been blocked, and three arrests have been made, with further investigations ongoing.
The illegal operations of these foreign entities not only harm fair competition but also skew the market, harming local businesses. Investigations have also raised national security concerns, as funds processed through mule accounts may be funneled into illicit activities. To make matters worse, popular Bollywood celebrities, cricketers, and social media influencers have been found endorsing these unregulated platforms, putting their followers at risk.
DGGI has warned the public to avoid engaging with offshore gaming platforms, as it could jeopardise personal finances and indirectly support activities that undermine financial integrity and national security.