• Notification Date: 07-11-2023
• Notification No: N/A

Offshore e-Gaming Apps planning to Attract Users using no-GST Ploy

Offshore entities of Indian real money gaming apps are trying to lure customers with social media ads, promising their bets won’t be taxed under the 28% slab of the Goods and Services tax (GST).  
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Offshore counterparts of India-based real money gaming (RMG) applications have upped their game and are trying to attract customers with advertisements that their bets won’t attract 28% Goods and Services tax (GST). 
 
Driving the news: “Post the October 1 notification on the 28% GST applicable on RMG apps, there has been a sudden surge in the advertisements by the offshore betting applications on social media platforms claiming that their platforms don't attract any GST and the sum thus saved would be credited in the accounts of the customers,” a senior government official told ET. 
 
Govt at work: The official said the ads have been brought to the notice of both Directorate General of GST Intelligence (DGGI) and the Enforcement Directorate (ED) probing players, including the likes of Mahadev Book, Lotus365, FairPlay, Reddy Anna, Laser Book, Tiger Exchange, BetBook247 and Gold365, Parimatch and others. 
 
Sources told ET that probe agencies have alerted the government on these apps being used for causing financial insecurity. 

Multiple challenges: Probing agencies face numerous challenges such as tracking the real owners of these apps since most of them are based in offshore tax havens; the connection with the underworld, particularly the Dawood gang; the use of illegal means of transactions like hawala and cryptocurrency; and the use of payment getaways using fake credentials. 
 
Quick catch-up: Earlier this month, the GST Council signalled there would be no back-pedaling on the 28 percent levy on bets made in online gaming, casinos and horse racing from October 1, despite 13 states not having passed the enabling laws yet.