The Director General of GST Intelligence (DGGI), under the Department of Revenue, has issued a takedown notice to Google against six online gaming and gambling entities for failing to register in India and evading payment of Integrated Goods and Services Tax (IGST).
The targeted platforms include MGM91.com, Shakunimama.com, Khelomama.com, 247majestic.com, Redgames1.com, and karabet.in. A review of these websites reveals they host a range of games of skill and chance from online roulette and teen patti to blackjack and more.
Legal Grounds for the Action
The notices, sent on August 1, invoked provisions under Section 79(3)(b) of the Information Technology Act, Section 3(1)(d) of the IT Rules, 2021, and Section 14A(3) of the IGST Act, 2017, citing "security of the state" as a key reason for flagging the platforms.
According to a copy of the notice, the DGGI investigation found these entities offered "online money gaming services" to Indian users, making them liable to pay IGST under Section 14(a)(1) of the IGST Act, 2017. The probe also revealed they accepted payments through UPI, wallets, net banking and other channels, yet failed to register for GST in India.
The DGGI ordered that the websites be blocked within 36 hours of the notice. However, as of August 10, the sites remained accessible. Queries sent to Google and the DGGI are pending response, and attempts to contact the gaming platforms were unsuccessful.
Context: Taxation of Online Gaming
The move comes amid the Centre's firm stance on taxing online gaming. On August 5, the government informed the Supreme Court that the full face value of bets, the total stake amount should be subject to GST, regardless of whether the game is based on skill or chance.
In October 2023, the central government clarified that a 28% GST applies to the full face value of bets, replacing the earlier model where GST was levied only on the platform fee. This shift has been a contentious issue for the gaming industry, as it significantly increases the tax burden on operators and players alike.
With the latest crackdown, the government has reinforced its zero-tolerance approach toward GST non-compliance in the fast-growing online gaming sector, a space already under heightened scrutiny for both revenue leakage and regulatory concerns.
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