NEW DELHI: The government is working on ways to tighten noose around the offshore entities involved in providing online betting and gambling services to Indian residents without paying goods and services tax (GST), ministry sources confirmed to this newspaper.
As per the sources, several offshore companies providing platforms for online betting and gambling have not registered on the GST portal, hence avoiding tax payments. The government wants to bring all such companies under the ambit of GST, as they are collecting funds and offering services in the country.
“The Centre is unable to serve notices to these entities in the absence of their permanent office in India. Currently, we are not able to trace such companies as they keep changing their bank accounts on foreign shores,” the government official said. Meanwhile, a Delhi-based lawyer confirmed to this newspaper that some of his clients have received legal notices.
“Yes, this is on the premise that online gaming is otherwise covered under an entry called OIDAR (online information database access and retrieval) services there should be a collection of 18 per cent GST. And if it’s gambling then 28 per cent GST should be collected on the face value of bets placed,” the lawyer cited above said.
As per Ankur Gupta, practice leader of indirect tax at SW India, similar to other OIDAR services, authorities are bound to face challenges in recovering dues from overseas gaming platform owners as there are no defined methodologies or regulations imposed to reach out to such overseas entities.