Govt to set up panel to ensure compliance by online gaming platforms: Report

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An inter-departmental committee with representatives from ED, RBI, tax and consumer affairs departments may be set up to combat the proliferation of online gaming platforms and ensure regulatory compliance, a DGGI report said according to a report by Business Standard.

The GST intelligence wing of the Central Board of Indirect Taxes and Customs (CBIC) has initiated action against 118 domestic online gaming entities, and Show Cause Notices have been issued to 34 taxpayers involving tax amount of Rs 1,10,531.91 crore last year. The companies have approached the Supreme Court challenging the notices and a bench headed by Chief Justice is hearing the matter.

It is worth noting that on the recommendation of the GST Council, certain amendments have been made in the CGST Act, 2017 and IGST Act, 2017 vide Central Goods and Services Tax (Amendment) Act, 2023 and the Integrated Goods and Services Tax (Amendment) Act, 2023 with effect from 01.10.2023 to provide clarity on the taxation of supplies in casinos, horse racing and online gaming.

These amendments inter alia provide a level playing field to the suppliers of online money gaming based in India vis-à-vis the suppliers of online money gaming located outside India supplying online money gaming to the recipients in India. Registration has been made mandatory for such overseas operators of online money gaming and provisions have been made for punitive action against such suppliers, including blocking of their websites, in case of contravention of provisions under GST law.

Post-COVID-19, the online gaming industry has grown exponentially in the last few years, at a CAGR of 28 per cent, reaching Rs 16,428 crore in FY23-24 as per an industry estimate.

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