DGGI proposes global cooperation to curb GST evasion in OIDAR
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GST investigation arm the Directorate General of GST Intelligence (DGGI) has suggested reciprocal arrangements with foreign governments for information sharing and enforcement measures as well as blocking of websites to prevent tax evasion in Online Information and Database Access or Retrieval (OIDAR) services like e-gaming, online education and advertisement.
The move has been necessitated as it has come to DGGI's notice that there are entities, including online casinos that are based out of tax havens and also those which operate through offshore VPNs and cloud-based platforms. These entities are non-cooperative and appear to intentionally avoid tax compliance, and hence an information exchange with global law enforcement agencies would help crack down on any evasion.
OIDAR services are those which are delivered over the internet or electronic network and whose supply is essentially impossible without Information Technology. It includes a wide array of services viz cloud services, digital content, online gaming, online advertising etc. When such services are provided by an offshore entity to a non-taxable recipient, the supplier becomes liable for obtaining registration and discharging GST on the same. Currently, as many as 574 offshore entities providing OIDAR Services have registered themselves with the GST department, and annual revenue from this sector has increased from Rs 80 crore for the FY 2017-18 to Rs 2,675 crore for 2023-24 fiscal.
