DGGI Steps Up Online Betting GST Probe, Searches Fintech Offices in Chennai, Mumbai and Bengaluru

Hyderabad: The Directorate General of GST Intelligence (DGGI), Hyderabad Zonal Unit, has intensified its investigation into alleged GST violations linked to a multi-crore online betting case, extending its search operations to fintech and technology companies in Chennai, Mumbai and Bengaluru.

The latest action is part of an expanding investigation in which tax officials are attempting to trace the movement of money, examine company records and understand the possible links between businesses involved in the financial transactions under scrutiny.

According to sources familiar with the investigation, the multi-city operation concluded last week. During the searches, officials reportedly collected documents, digital records and other material that could help investigators reconstruct financial transactions and determine whether different entities had any connection with the alleged online betting operation.

The companies whose premises came under the DGGI’s scanner include IppoPay Technologies Private Ltd, RUGR Fintech Pvt Ltd and DecFin Tech Pvt Ltd.

While the searches represent a significant development in the investigation, the actions taken by the agency are part of an ongoing process and do not by themselves establish criminal or tax liability against any company or individual.

IppoPay search focuses on documents and electronic records

The DGGI’s search at the Chennai office of IppoPay Technologies was conducted last month.

According to sources, investigators entered the premises and examined a range of company documents as well as electronic information stored on laptops, hard drives and other devices.

Officials were reportedly looking for records that could help them understand the nature of financial transactions and determine whether the company had any connection with activities being investigated as part of the wider online betting case.

Employees present at the office reportedly cooperated with the search. They provided statements to the investigating officers and shared information stored on cloud platforms, mobile phones and laptops.

The digital material could be particularly significant because financial investigations involving online platforms often leave behind extensive electronic records. Transaction histories, payment information, communications and other digital data can potentially help investigators establish connections between different entities and trace the movement of funds.

Sources said the DGGI recovered documents and electronic records that it considered relevant to the investigation.

However, some senior members of the company’s management were reportedly unavailable during the operation. According to sources, the company’s director and chief technology officer could not be reached, with their phones switched off or otherwise unreachable.

The records collected during the search are expected to be examined in detail before investigators determine whether they contain evidence relevant to the alleged GST violations.

RUGR Fintech office closed when DGGI team arrived

The investigation also took officials to the Bengaluru premises of RUGR Fintech Pvt Ltd.

According to sources, the DGGI team attempted to carry out searches at the office on March 30 and again on April 1. However, officers reportedly found the premises closed.

A work-from-home notice was displayed at the office, sources said.

Investigators allegedly attempted to contact the company’s directors through calls and messages, but did not receive a response.

With the search unable to proceed, the DGGI turned to another legal measure and issued summons under Section 70 of the CGST Act to RUGR director KV Arangasamy.

The director was asked to appear before the investigating officers on April 8 and provide information in connection with the case.

The summons are intended to help investigators obtain clarification, statements and documents that could assist them in understanding the company’s operations and its possible relationship with transactions being examined.

For investigators handling a complex financial case, questioning directors and senior officials can help establish who was responsible for particular decisions, how transactions were authorised and what relationships existed between different businesses.

DecFin office sealed in Bengaluru

Another company that came under scrutiny was DecFin Tech Pvt Ltd.

DGGI officials reportedly visited the company’s Bengaluru office on April 2, but found the premises locked.

According to sources, the building manager informed the officers that the office had remained closed for two days because of what was described as “networking issues.”

The DGGI subsequently sealed the premises under Section 67(4) of the CGST Act.

Sources said the decision was taken amid concerns about alleged non-cooperation and the possibility that material relevant to the investigation could be removed, altered or tampered with.

Sealing the premises allows investigators to preserve the location while they continue their inquiry and assess whether records or other evidence inside could be relevant to the case.

However, the sealing of an office should be viewed as an investigative measure and not as a final finding that the company or its employees were involved in wrongdoing.

Digital evidence plays an increasingly important role

The latest operation also highlights how tax authorities are increasingly relying on digital evidence while investigating complicated financial transactions.

In traditional investigations, officials may focus heavily on invoices, account books and physical documents. In fintech-related cases, however, crucial information can also be stored across laptops, mobile phones, cloud platforms, servers and other digital systems.

These records can potentially help investigators track transaction timelines, identify payment patterns and establish communications between different companies.

In this case, the DGGI is reportedly examining electronic records along with physical documents and statements obtained during the investigation.

The agency’s broader objective is to determine whether the companies under scrutiny had any role in transactions connected to the alleged online betting network and whether GST liabilities arising from those transactions were correctly accounted for and paid.

DGGI attempts to connect the wider financial network

The latest searches suggest that investigators are looking at the case as a broader financial network rather than focusing only on individual transactions.

Where several fintech companies, technology providers and payment-related entities are involved, investigators may examine the nature of services provided, the flow of funds, contractual arrangements and communications between businesses.

Such an examination can help authorities understand whether companies were operating independently or whether their activities were connected through common transactions or arrangements.

The information gathered during the recent searches may therefore be compared with records obtained earlier as part of the DGGI’s wider investigation.

The relevance of the seized material, however, will become clear only after investigators complete their analysis.

Fino Payments Bank CEO’s arrest remains a key development

The broader online betting-related GST investigation has already attracted attention following the arrest of Rishi Gupta, CEO of Fino Payments Bank.

Gupta subsequently approached the Telangana High Court, seeking relief that included quashing of the case and bail. The court dismissed his plea.

His arrest has added significance to the investigation because authorities are examining financial and fintech-related links surrounding the alleged betting operation.

The latest searches indicate that the DGGI is continuing to examine the wider network and is not restricting its investigation to the individuals already named in the case.

Investigation stretches across three major business hubs

The involvement of companies operating in Chennai, Mumbai and Bengaluru reflects the increasingly interconnected nature of India’s technology and fintech sector.

A company may have its headquarters in one city, technology operations in another and financial or administrative functions elsewhere. This can make financial investigations more complex and may require officials to examine records at multiple locations.

The DGGI’s latest operation appears to follow this broader approach, with investigators collecting physical documents, digital evidence and statements from different sources.

By bringing information from several locations together, investigators can potentially develop a clearer picture of the financial transactions under scrutiny.

What happens after the searches?

The searches are only one stage of the investigation. The material collected by the DGGI will now need to be examined and compared with other evidence gathered during the case.

Investigators could scrutinise transaction records, digital communications, company documents and statements to determine whether there are inconsistencies or unexplained financial links.

If further clarification is required, company directors, executives or other individuals may be called for questioning or asked to provide additional documents.

The agency could also issue further summons or take additional action depending on what emerges from the examination of the seized material.

At the same time, it is important not to draw conclusions about guilt solely from the fact that a company has been searched or that premises have been sealed.

Probe continues as investigators examine the evidence

The DGGI’s latest action marks another significant stage in its investigation into alleged GST irregularities connected with the online betting case.

With searches conducted across multiple cities and digital records reportedly collected from technology and fintech companies, investigators are now expected to focus on connecting the pieces of information gathered during the operation.

The coming weeks could provide greater clarity on the nature of the transactions, the relationships between the entities under scrutiny and whether any GST liabilities were allegedly avoided or incorrectly reported.

For now, the investigation remains ongoing. The companies and individuals mentioned in connection with the case are entitled to due process, and allegations or investigative actions should not be treated as proof of wrongdoing unless established through the appropriate legal process.

News source: Information for this article was gathered from a variety of reliable news outlets.