After GST, income tax probes online gaming firms

The net is closing in on offshore online gaming platforms that may be evading the long arms of the Indian taxman. Sources have told Business Today TV that the Central Board of Direct Taxes (CBDT) is firming up its plans to tackle this issue.

“We have observed that many offshore apps are generating huge business, but the commensurate amount of tax is not being paid. We are looking into this”, a finance ministry official said.

The income tax department is collating data on the possible tax evasion by online gaming companies. Recently, the Bengaluru wing of the GST intelligence wing had issued a show cause notice to online gaming company Games Kraft Technology Pvt Ltd for an alleged evasion of Rs 21,000 crore.

Sources add that the income tax department may chase a much higher – Rs 60,000 crore — of alleged tax evasion by online gaming platforms.

To this end, the taxman is working closely with the Ministry of Electronics, Information, and Technology to put curbs on some online gaming apps.

The government is also working on setting up a separate regulatory body and mandating registration for online gaming start-ups in order to maintain a compliance-based registration system in the future.

Source from - https://www.businesstoday.in/technology/story/exclusive-after-gst-income-tax-probes-online-gaming-firms-351757-2022-11-03