According to Minister of State for Finance Pankaj Chaudhary, tax investigators are looking into GST evasion by gaming enterprises that totaled nearly Rs 23,000 crore between April 2019 and November 2022. The minister stated in a written response to a question raised in the Lok Sabha that the Enforcement Directorate has seized more than Rs 1,000 crore in criminal proceeds in many cases involving cyber and cryptocurrency asset frauds, where online gaming and other activities were used to divert the proceeds.
Regarding GST avoidance, Chaudhary stated that the Central Board of Indirect Taxes and Customs (CBIC) has opened inspections into a number of gaming companies (including online gaming organizations) with locations both in India and abroad.
“In so far as evasion of Goods and Services Tax (GST) is concerned, CBIC formations have initiated investigations against some gaming companies (including Online gaming companies) located in India as well as abroad. The estimated evasion of GST by these companies works out of Rs. 22936 crores, relating to the period April 2019 to Nov. 2022,” said Chaudhary in a statement.
In addition, the Directorate of Enforcement is looking into a number of cases involving cyber and cryptocurrency asset scams in which online gambling and other activities were used to divert earnings.
In these situations, as of December 6, 2022, more than Rs 1,000 crore in criminal profits have been attached, seized, or frozen in accordance with the Prevention of Money Laundering Act, 2002. (PMLA). The Special Court PMLA has also received ten Prosecution Complaints (PCs), including two supplemental PCs.
Assets worth Rs 289.28 crore were seized under the Foreign Exchange Management Act of 1999’s Section 37A. Chaudhary responded that the information is unavailable because there is no unique identification code for online gambling organizations in the Income Tax Return in response to a question about whether the Income Tax Department has sent letters to numerous gaming enterprises for non-payment of tax.
“Necessary action as per provisions of law is taken against such companies,” the statement further read.