Casino chain operator Delta Corp has received tax notices totaling Rs 16,822 crore from the Directorate General of GST Intelligence, Hyderabad, the company informed on Frdiay. The notice for payment of shortfall tax, interest, and penalty under GST pertains to the period from July 2017 to March 2022.
As per the company exchange filing, Delta Corp and three of its subsidiaries have been issued GST notices totaling Rs 16,822 crore. The notice for Delta Corp is for Rs 11,140 crore, while the notice for its subsidiaries, Casino Deltin Denzong, Highstreet Cruises, and Delta Pleasure Cruises, is for Rs 5,682 crore.
“The DG Notice advises the Company to pay an alleged tax liability of Rs 1,11,39,61,03,423 along with interest and penalty for the period from July 2017 to March 2022,” Delta Corp said in a regulatory filing. If they fail to do so, the company will be served with a show-cause notice, Delta Corp said in the regulatory filing.
“The amount claimed in the DG Notice is inter alia based on the gross bet value of all games played at the casinos during the relevant period. Demand of GST on gross bet value, rather than gross gaming revenue, has been an industry issue and various representations have already been made to the Government at an industry level in relation to this issue,” the company said.
The casino operator said that the Company and its subsidiaries have been legally advised that all the above notices and the tax demands are arbitrary and contrary to law, and the company and its subsidiaries will pursue all legal remedies available to them to challenge such tax demands and related proceedings.
Meanwhile, shares of Delta Corp on September 22 ended 0.029 per cent lower at Rs 175.25 a piece on BSE. According to a Business Today report, Delta Corp’s shares have lost about 29 per cent of their market value since the government proposed new GST rate in July.
The latest notice by GST authorities is the second highest tax demand on an e-gaming company so far. Last year, Bengaluru-based online gaming firm Gameskraft was asked to pay Rs 21,000 crore in taxes. The matter is now before the Supreme Court, which on September 11 stayed the Karnataka High Court’s May 2023 judgment that quashed the tax notice, as per the report.
Casinos and online gaming companies in India have been struggling with the government’s imposition of a 28 per cent GST rate. On July 11, the GST Council decided to impose a 28 per cent tax on the turnover of online gaming companies, horse racing, and casinos. This has caused uncertainty in the sector, and Delta Corp, India’s largest casino company, has put on hold plans to take its online gaming unit public.
“The investing community obviously would want absolute crystal clarity when it comes to online gaming and they would want a clear picture as to what the way forward is and without which, nobody is going to put $1 into any new investment, especially in a sector which has this kind of overhang,” Delta Corp CFO Hardik Dhebar had said, as per a Moneycontrol report.