Revenue secretary Tarun Bajaj has said that teams are working on curbing tax evasion through online gaming especially the offshore gaming websites. In an interview to Economic Times, responding to a question on online gaming Bajaj who retires on Wednesday said, “teams working on all these fronts. We may be a little behind the people who are doing these things, but we will soon get there.”

He said tax evasion through online gaming is something that even advanced countries are facing.

AIGF, the apex skill gaming body has been consistently raising the issue of offshore betting websites and the tax evasion risk posed by them. AIGF has written to PM Modi recently on this.

With a view to curb the menace, in June, the Consumer Affairs Ministry issued guidelines under Consumer Protection Act that prohibited surrogate advertising which is normally adopted by offshore betting websites.

In October, it was reported that the tax department has requested MEITY to ban offshore gambling websites under the IT Act for tax evasion. The Ministry of Information and Broadcasting (I&B) has instructed OTT, TV and other media platforms in October to refrain from advertising/promoting offshore gambling companies – a second time since June.

Following this, illegal offshore gambling and betting websites like Betway, Dafabet, Pari Match and 1xbet were made inaccessible.

The offshore betting companies are also under the scanner of Enforcement Directorate, the investigative body under Foreign Exchange Management Act, 1999 (FEMA) for routing betting proceeds. FEMA doesn’t permit remittances in relation to betting. In August, the Central Government prohibited Indian entities from investing in overseas gambling ventures.

Bajaj’s recent comments gains significance in light of these recent developments. This is also the time when the tax department starts working on the budget for next year.

While action against offshore betting firms is a welcome move, the GST department is moving at fast pace against domestic online skill gaming entities for alleged GST evasion. Recently, the GST Intelligence wing has served a demand notice of over INR 21,000 crores to Gameskraft.