Government says adequate provisions exist to enforce GST on offshore gaming platforms
online gaming platforms, which do not pay the prescribed goods and services tax (GST), the government said on Tuesday. Minister of state for finance Pankaj Chaudhary was responding to a question in the Rajya Sabha on whether the decision to impose 28% GST on online gaming will have an impact on gamers, who may shift to offshore platforms.
“Some representations have been received from stakeholders stating so. Sufficient enforcement provisions exist to take action against offshore platforms which do not pay prescribed GST,” Chaudhary said in a written response.
The minister’s comment comes a day before the GST Council’s special meeting, which will take a call on the applicability of the levy. Since the GST Council's July 11 decision to impose 28% tax on the full face value for online gaming, firms in the real money gaming sector have raised concerns that the high tax burden could result in users of such platforms migrating to illegal offshore gambling and betting platforms.
On July 14, in an open letter to the government, a group of 130 online gaming companies and industry associations had underscored that the biggest beneficiary of the change in tax regime will be “black market operators including illegal offshore gambling websites and nefarious unscrupulous elements.” “This will result in substantial tax loss to the government and will expose Indian gamers to harmful offshore gambling websites, which are not accountable to the Government of India,” the letter had noted. On July 24, ET had reported that several international gaming companies were luring Indian users to their websites with social media posts holding out the promise of earning money and “avoiding 28% GST”.
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