Indian Tax authorities brings 11 betting conglomerates under investigation for alleged GST fudging

After the betting companies registered in territories as diverse as Australia, Curaçao, Cyprus, Malta, the Philippines and Russia, they found the leeway to not pay the Goods and Services Tax (GST) in India, the investigating arm of the indirect tax department has rolled its investigation to bring them to line.

Once New Delhi imposed the lockdown across India in last March, Work from Home became a normal exercise which allowed people to indulge more time with their smartphone. Betting and online skill-based gaming companies were some of the biggest beneficiaries as traffic from India continued to increase even after the nationwide lockdown was eased in phases.

According to Economic Times, the foreign companies like Betway, Dafabet, ComeonConnect, RoyalPanda, EuropaCasino, 22Bet, Melbet, 10CRIC, 1XBet, Bet365, and LeoVegas didn’t pay the proper GST in the entire period as they argued that what they allowed was not betting or gambling, but ‘skill-based gaming’.

“The place of supply, for the purpose of GST collection, needs to be evaluated for determining whether an overseas service provider having customers in India would be required to register and charge GST in India for services provided to customers in India. This is an area that is susceptible to multiple interpretations,” said MS Mani, partner, Deloitte India, told ET.

However, the Director General of Goods and Services Tax Intelligence (DGGI), which is the premier investigating agency of the indirect tax department, wrote to the banks to share the complete details of these 11 websites and their holding companies to get a clear idea of their GST filing and the benefits they incurred from the Indian market.

The authorities in the Indirect Tax Department are of the view that those syndicates must pay GST on all transactions involving a resident Indian. Uday Pimprikar, national leader, indirect tax, EY India, however, stated that it is a very tricky scenario when it comes to casino and betting companies.

“While it is a globally accepted position that the place of supply is where the consumer is located, irrespective of where the supplier is located, the situation is complicated with regards to betting and casino businesses,” Pimprikar said.