Govt Plans Action to Ensure Compliance by Online Gaming Platforms

Strategies for Compliance in the Online Gaming Sector

The booming online gaming industry is currently under scrutiny, prompting the government to consider establishing an inter-departmental committee. This committee will comprise members from the Enforcement Directorate (ED), Reserve Bank of India (RBI), tax, and consumer affairs departments to tackle non-compliance issues among online gaming platforms.

Tax Compliance Challenges

The Directorate General of GST Intelligence (DGGI) reported actions against 118 domestic online gaming entities for not remitting the mandated Goods and Services Tax (GST) at a rate of 28%. Show Cause Notices totaling Rs 1,10,531.91 crore have already been sent to 34 taxpayers. Additionally, numerous offshore entities have been flagged for non-compliance, complicating tax enforcement efforts.

The Rise of Online Gaming

The online gaming industry is a significant sector, achieving a staggering CAGR of 28% with an estimated market size of Rs 16,428 crore for FY23-24. This growth is attributed to increased smartphone usage and better internet connectivity. However, the operation of these platforms often employs tactics such as URL changes and utilizing dark web services to evade tax obligations.

• Importance of consumer protection
• Need for regulatory compliance
• Awareness of safe gaming practices

The upcoming Supreme Court ruling on the classification of games like rummy and poker may also reshape the legal landscape surrounding online money gaming.

Conclusion

Awareness campaigns and partnerships with foreign governments may be crucial in enforcing regulations within this high-risk industry.