The Director General of GST Intelligence (DGCI) under the Department of Revenue has sent a take-down notice to Google, flagging six online gaming and gambling entities for not registering in the country and failing to pay Integrated Goods and Services Tax (IGST).
The six platforms include MGM91.com, Shakunimama.com, Khelomama.com, 247majestic.com, Redgames1.com and karabet.in. A look at the websites show that the gaming entities offer a host of games of skill and games of chances like online roulette, teen patti, blackjack and so on.
The notices were sent on August 1, under Section 79 (3) (b) of the Information Technology Act read with Section 3 (1) (d) of the IT Rules , 2021 and Section 14 A (3) of the Integrated Goods and Services Tax Act, 2017. The body cited 'security of the state' as a reason for flagging these platforms.
According to a copy of the takedown notice reviewed by Moneycontrol, an investigation by Director General of GST Intelligence found that platforms offered "online money gaming services" to Indian citizens and hence were liable to pay IGST under Section 14 (a) (1) of the IGST Act, 2017. And DGST has alleged that the entities have failed to pay the said tax.
Further, DGST stated that these entities offer these games through their websites, Android/iOS applications, and accept payments, including through UPI, wallets, net banking, and so on.
However, since they had failed to register themselves in India and pay taxes, they were liable to be blocked for access, the DGST said in the notice, adding that the websites had to be blocked within 36 hours.
Moneycontrol was still able to access the website as of August 10. The publication has reached out to Google and the DGST with queries on the matter. However, the publication was not able to reach out to the online gaming entities in question. The article will be updated when a response is received.
On August 5, Centre told the Supreme Court that in online gaming, the entire stake amount, or the ‘full face value of bet’, should be considered for taxation. The 'full face value' of bets refers to the entire amount of money (or its equivalent in chips or tokens) that a player wagers online regardless of whether it's a game of skill or chance.
In October 2023, the central government clarified that a 28 per cent GST was applicable on the full-face value of bets. Since then, this has been a contentious point for the gaming industry as it significantly increases tax burden compared to the previous model.
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