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Tag: Directorate General of GST Intelligence

  • Delhivery Hit with INR 1.36 Crore Tax Penalty by Income Tax Department

    The Delhi Income Tax Department has issued a penalty order of INR 1.32 crore to the logistics startup Delhivery. According to the company’s exchange filing, the Assessing Officer of Central Circle 18, Delhi, issued the penalty notice to it on June 28.

    The ruling relates to specific expenses of INR 3.95 crore incurred by the corporation during the 2015–16 fiscal year, according to the exchange filing. The expenses were not disclosed by the corporation.

    Delhivery has stated that it will challenge the order before the proper authority and refuse to pay the fine. It further stated that the order has no significant effect on the company’s financials or operations.

    Delhivery Under a Strict Scanner of Tax Authorities

    The Directorate General of GST Intelligence, Mumbai, sent Delhivery a show-cause notice earlier last month for INR 49.19 crore. The order dealt with a question of interpretation regarding tax rates.

    Earlier in February 2025, the Directorate of Commercial Taxes of the Government of West Bengal ordered Delhivery to pay INR 5.35 crore in goods and services tax (GST).

    A penalty of INR 53.57 lakh and interest on the overdue amount were also imposed by the order, which was issued on February 26 in accordance with Section 73 of the West Bengal Goods and Services Tax Act, 2017, and Section 20 of the Integrated Goods and Services Tax Act, 2017.

    Delhivery’s regulatory filing states that the tax demand is the result of the Input Tax Credit (ITC) being denied for the fiscal year 2020–21.

    According to the corporation, the disallowance is predicated on claims from dealers whose GSTINs were cancelled retroactively, claims from dealers who failed to file their GSTR-3B forms, and alleged short ITC reversals under Rule 42/43.

    As a result of these conclusions, the tax authorities confirmed the demand for INR 5.35 crore along with an additional INR 53.57 lakh penalty.

    CCI Greenlights Delhivery’s Acquisition of Ecom Express

    Delhivery Limited’s purchase of a minimum of 99.44% equity and preference shares in Ecom Express Limited, on a fully diluted basis, was authorised by the CCI earlier this month.

    In April, Delhivery announced that it had paid INR 1,407 crore to acquire the majority of Ecom Express.

    The publicly traded logistics behemoth Delhivery has expanded into a full-stack business with supply chain management, warehousing, cross-border logistics, and express package and freight services.

    Delhivery, which is well-known for its significant investments in automation and data-driven delivery intelligence, has integrated Ecom Express, a leader in logistics for e-commerce, in an effort to increase last-mile capabilities and consolidate market dominance.

    Despite not being publicly listed, Ecom Express has established a strong foothold in India’s rapidly expanding e-commerce industry thanks to a network that is designed for returns, reverse logistics, and warehousing. One of the biggest integrated logistics systems in the nation is anticipated to be created by the acquisition.

  • The Centre Designates GST Officer to Block Websites Run by Online Gaming Companies that are Evading Taxes

    The Directorate General of GST Intelligence Headquarter (DGGI-HQ) has been given authority by the Indian government to direct intermediaries to disable the websites of online gaming enterprises accused of tax evasion. The government has designated the Additional/Joint Director (Intelligence) as the nodal officer for the assignment, according to a notice published in the Ministry of Finance’s gazette.

    Section 14A(3) of the Integrated Goods and Services Tax Act, 2017 gives the DGGI-HQ the authority to block any “information generated, transmitted, received, or hosted in any computer resource” that an online gaming company that has not paid taxes has used. This covers businesses based outside of India.

    Clause (b) of sub-section (3) of section 79 of the Information Technology Act, which imposes liability on intermediaries for failing to block or remove content upon government orders, is also cited in the notification. The material Technology (Guidelines for Intermediaries and Digital Media Ethics Code) Rules’ clause (d) of subrule (1), which forbids intermediaries from keeping illegal material, is also included.

    The government’s intention is to thwart tax-evading foreign gambling platforms by instructing intermediaries, such as search engines and social media platforms, to halt their online operations in India, according to the gazette notification.

    Sector Evaded Taxes Worth INR 81,875 Crore in FY24

    Earlier this year, the DGGI declared that the largest amount of GST evasion in the fiscal year 2023–2024 was caused by the online real money gaming industry. In FY24, the sector avoided paying taxes totalling INR 81,875 crore in 78 cases. The distinction between “real money online gaming” and gambling was effectively eliminated when the government raised the GST on real money online gaming from 18% to 28% earlier in 2023.

    Numerous businesses received extensive tax evasion warnings dating back to prior fiscal years when the legislation went into effect on October 1, 2023. According to reports, Delta Corp received a notice of INR 16,822 crore for the period of July 2017 to March 2022, while Dream Sports received claims ranging from INR 25,000 to INR 40,000 crore.

    Finance Minister Nirmala Sitharaman later disclosed that within six months of the raise, tax receipts from the sector had increased fivefold. From October 2023 to March 2024, collections increased 412% to INR 6,909 crore from INR 1,349 crore.

    Government Under Strong Criticism

    The industry protested the tax hike, which was a highly contentious move. In a letter to the government, more than 100 skill-gaming businesses claimed that it would “reverse the growth trajectory of the industry.” According to the letter, the GST will incentivise offshore gambling operators, attract Indian customers to them, and ultimately result in neither the expansion of the legal industry nor the best possible revenue collection.

    CoinSwitch Announces INR 600 Cr Recovery Plan for Hack Victims
    CoinSwitch plans to propose a recovery plan worth INR 600 crore to assist victims of recent hacks, aiming to restore trust and provide relief.
    StartupTalkyNitin Konde

  • In the Indian Online Gaming Space, DGGI Discovered Tax Evasion of INR 81,875 Crore in FY24

    A total of 78 instances were investigated by the Directorate General of GST Intelligence (DGGI), which is the central investigative and anti-evasion arm of the finance ministry. The DGGI discovered the highest-ever goods and services tax (GST) evasion by the online money gambling industry, which amounted to INR 81,875 crore in FY24.

    The Directorate General of Income Tax (DGGI) stated in its most recent annual report that it discovered a record 6,084 instances of tax evasion in 2023-24, involving INR 2.01 trillion in GST. This figure is twice as high as the INR 1.01 trillion that was discovered in FY23 over 4,872 cases.

    There 46% of the incidents of tax evasion were related to the non-payment of taxes through clandestine supply and undervaluation, 20% involved fraudulent Input Tax Credit (ITC) claims, and 19% pertained to incorrect ITC claims or refusal to reverse them. These figures were noted in the report.

    Similar Cases Were Witnessed in Other Sectors

    The Banking, Financial Services, and Insurance (BFSI) sector came in second place, with a total of INR18,961 crore being evaded over 171 cases. Additionally, the pharmaceutical industry (22 cases, INR 40 crore) and works contract services (343 cases, INR 2,846 crore) were among the other industries under consideration.

    Moreover, during the fiscal year 24 (FY24), there were 1,976 instances of GST evasion that were discovered in the iron, copper, scrap, and alloys industries, with a total value of INR 16,806 crore. The industries of pan masala, tobacco, cigarettes, and bidi came in third place in terms of evasion, with 212 instances totalling INR 5,794 crore. There were also other industries, such as plywood, lumber, and paper (238 instances, worth INR 1,196 crore), electrical devices (23 cases, worth INR 1,165 crore), and marble, granite, and tiles (235 cases, worth INR 315 crore).

    Announcement to Form Inter-Departmental Committee

    In addition, the DGGI report suggested the establishment of an interdepartmental committee that would include representatives from the Enforcement Directorate, the Reserve Bank of India, tax authorities, and consumer affairs departments. The purpose of this committee would be to combat the proliferation of online gaming platforms and ensure compliance with regulatory requirements.

    Consequently, the time has come to implement a multi-pronged strategy in order to address this area. Regulatory compliance, consumer protection, and national security are all topics that were discussed in the report that was only recently made public by the DGGI. The intelligence wing of the Goods and Services Tax (GST) has taken action against 118 domestic online gambling businesses and issued show-cause notifications to 34 taxpayers, involving a total tax amount of INR 1.1 trillion. These businesses had failed to pay the GST at the specified rate of 28%.

    Online Gaming Faces 28% GST Hike: Expert Insights
    The new 28% GST on online gaming has produced divided opinions about the industry’s future in India. Some experts condemn the GST hike, while others see it as boosting government revenues.
    StartupTalkySayantan Mondal