The Ministry of Finance on Monday informed that the authorities have initiated investigations against some gaming companies located in India as well as abroad. The estimated evasion of GST by these companies is estimated to be Rs 22,936 crore from April 2019 to November 2022, MoS Finance Pankaj Chaudhary said in a written reply to a series of questions on non-payment of tax by gaming companies.
To a question on whether various gaming companies have not paid tax of nearly Rs 58,000 crore, the minister said: “CBIC (Central Board of Indirect Taxes and Customs) formations have initiated investigations against some gaming companies (including Online gaming companies) located in India as well as abroad. The estimated evasion of GST by these companies works out of Rs 22936 crores, relating to the period April 2019 to Nov. 2022.”
The questions were asked by YSR Congress MPs Vallabhaneni Balasouri and Lavu Sri Krishna Devarayalu. Both the leaders had also asked whether online gaming companies were not paying income tax and the Income Tax Department has issued notices to many gaming companies. To this, the minister said this information was not available, “since no specific identification code for online gaming entities is available in Income Tax Return”.
“The disclosure of information about specific taxpayer is prohibited except as provided under section 138 of the Income Tax Act, 1961,” he said.
The YSR Congress MPs also asked whether gaming companies have allegedly become routes to launder money. MoS Finance Pankaj Chaudhary said the Enforcement Directorate is investigating several cases related to cyber and crypto assets frauds wherein online gaming has been used for committing fraud and siphoning the proceeds generated thereof.
“In these cases, as on 06.12.2022, proceeds of crime of more than Rs 1,000 crore have been attached/seized/freezed under the provisions of Prevention of Money Laundering Act, 2002 (PMLA),” he said, adding that 10 Prosecution Complaints (PCs) including two supplementary PCs have been filed before the Special Court, PMLA.
Further, assets amounting to Rs 289.28 crore have been seized under section 37A of Foreign Exchange Management Act, 1999, the minister said.