DGGI Seeks Website Tracking for Payments to Combat Illicit Activities
India's Directorate General of GST Intelligence proposes requiring payment systems to record the originating website for transactions. The move aims to trace betting ecosystems and other illegal operations.
The Directorate General of GST Intelligence (DGGI) in India is proposing new regulations for online payment systems, mandating the recording of the website from which a payment originates. This requirement would also involve linking bank accounts to GST registrations associated with these websites.
The proposal stems from a 14-month DGGI investigation that uncovered an estimated ₹70,000 crore (approximately $840 billion) betting ecosystem. This network allegedly uses intermediary merchant companies to receive and route funds, obscuring the direct link between users on gaming sites and the payment processors.
The recommendation was submitted to the Central Board of Indirect Taxes and Customs (CBIC) in August. While discussions are ongoing, no draft rule has been published. The scope of this measure is being considered for broader application beyond betting to encompass other illicit activities, making it a general enforcement tool.
Currently, payment aggregators process transactions based on merchant data without verifying the user's browsing session. The proposed change would require aggregators to examine the user's journey to identify the originating website. However, challenges exist, as many Indian payments occur through apps or mobile interfaces lacking a traceable website origin.
Furthermore, the proposal aims to distinguish legitimate e-commerce from illegal operations. Many legitimate businesses, such as marketplaces and software-as-a-service platforms, operate with separate originating domains and merchant records. A rule that flags any mismatch could inadvertently impact regular e-commerce activities.