Tax authorities remain vigilant about evasion by online gaming companies and have launched investigations in India and abroad, the Ministry of Finance said on Monday.
The Central Board of Indirect Taxes and Customs has initiated investigations against some gaming companies—including online gaming ones—located in India and abroad for Goods and Services Tax evasion, according to the Minister of State for Finance Pankaj Chaudhary.
The estimated GST evasion by such companies works out to Rs 22,936 crore, relating to the period between April 2019 and November 2022, he said, while answering a question in the winter session of Parliament on Monday.
The minister clarified that details pertaining to online gaming companies that are not paying income tax and where the income tax department has issued notices are not available.
“No specific identification code for online gaming entities is available in the income tax return,” Chaudhary said. “The disclosure of information about a specific taxpayer is prohibited except as provided under Section 138 of the Income Tax Act, 1961.”
The Minister said that the Directorate of Enforcement is investigating cases related to cyber and crypto asset frauds, wherein online gaming has been used for committing fraud and siphoning the proceeds generated thereof.
As on Dec. 6, 2022, criminal proceeds totaling more than Rs 1,000 crore have been frozen under the provisions of the Prevention of Money Laundering Act, 2002.
“Ten prosecution complaints, including two supplementary PCs have been filed before the Special Court, PMLA. Further, assets amounting to Rs 289.2 crore have been seized under Section 37A of the Foreign Exchange Management Act of 1999,” the Minister said.