close

Login or Signup

close

Login or Signup

24 Apr 2022

Indian tax authorities are alerting overseas gaming, fintech and content service providers in distant jurisdictions like the US, Malta, and Curacao about the goods and services tax (GST) law to spare these offshore firms of nasty surprises later, a report on Economic Times said. 

An email, in the nature of an information flyer, is being sent to these offshore business-to-customer (B2C) entities by the Bangalore nodal office of the Central Board of Indirect Taxes and Customs which administers the GST under the central government. 

The IGST Act defines Online Information Data Base Access and Retrieval (OIDAR) to mean services whose delivery is mediated by information technology over the internet or an electronic network and the nature of which renders their supply essentially automated and involves minimal human intervention and impossible to ensure in the absence of information technology and includes electronic services and includes online gaming. When the supply is to the individual consumers i.e., B2C, the offshore suppliers are liable for paying integrated tax. Unlike the Rs 20 lakh threshold for levy of GST on domestic entities, the tax is applicable on various cross-border services irrespective of any cut-off amount. 

Several companies whose platforms are being used by Indian residents for entertainment, trading as well as educational purposes have so far received the communique from the tax office. 

In related news, the GST Council in May 2021 has constituted a minister group (GoM) to study whether or not any change in authorized provisions is required for the valuation of companies supplied by online gaming, racecourses and casinos which is yet to submit its report. 

While many foreign companies complied with earlier notices and paid the tax to close the matter, some of them had then questioned the practice of serving notices or summons via emails. “The overseas entities were of the impression that such communications, in accordance with international law, must be routed through their respective governments, as the local tax department does not have the jurisdiction,” said a lawyer specialising in taxation of digital services to ET. 

A 15% penalty can be imposed by the tax department if it believes that the GST was “intentionally avoided”. 

 

Share this Article

Trending Articles

Read breaking stories and latest news on gaming from India and around the world.

Illegal Indian betting money used to sponsor Pakistan cricket

Gaming

Illegal Indian betting money used to sponsor Pakistan cricket

Team G2G
17 May 2022
How to Regulate Online Gaming Platforms in India

Gaming

How to Regulate Online Gaming Platforms in India

Shrinivas Nayak
16 May 2022
Meghalaya: Congress joins chorus against gaming law

Gaming

Meghalaya: Congress joins chorus against gaming law

Team G2G
16 May 2022
Nazara reports 273% growth in PAT for FY21-22, to foray into web 3.0 games

Gaming

Nazara reports 273% growth in PAT for FY21-22, to foray into web 3.0 games

Team G2G
15 May 2022
BCCI Awards Title Sponsorship of Women's T20 Challenge 2022 to My11Circle

Gaming

BCCI Awards Title Sponsorship of Women's T20 Challenge 2022 to My11Circle

Team G2G
15 May 2022
MP High Court to hear petition seeking action against celebrities for promoting online gaming

Gaming

MP High Court to hear petition seeking action against celebrities for promoting online gaming

Team G2G
15 May 2022

Latest Videos

Check out the latest news videos, interviews, explainer and many more covering wide range of gaming topics.

Show All Videos

All Gaming Articles

Get latest industry updates directly into your inbox.