DGGI Suggests International Cooperation to Tackle OIDAR Tax Evasion

The Directorate General of GST Intelligence (DGGI) has proposed reciprocal arrangements with foreign governments to share information and take enforcement measures, including blocking websites, to curb tax evasion in OIDAR services such as e-gaming and online education. This move aims to address challenges in enforcing GST compliance among offshore entities.

The Directorate General of GST Intelligence (DGGI) has recommended international cooperation to combat tax evasion in the Online Information and Database Access or Retrieval (OIDAR) services sector. DGGI has suggested reciprocal information-sharing arrangements with foreign governments and blocking non-compliant websites to enhance enforcement measures.

The necessity for such steps arises from the discovery of offshore entities, including online casinos based in tax havens, which use VPNs and cloud platforms to evade tax compliance. Many of these entities are non-cooperative, making it difficult for DGGI to enforce GST laws effectively.

DGGI highlighted that 574 offshore OIDAR service providers are currently registered with the GST department, with significant revenue increase noted from Rs 80 crore in FY 2017-18 to Rs 2,675 crore in the current fiscal year. However, despite successful registration efforts with entities like Udemy Inc. and Canva Pty, there are still numerous unregistered entities using evasive tactics. To address these challenges, DGGI has proposed innovative measures, including coordination with the Reserve Bank of India for forex transaction data and registration on the KODEX platform.

(With inputs from agencies.)