Delta Corp, the prominent Goa-based casino operator, is grappling with another significant setback. The Directorate General of GST Intelligence in Hyderabad recently served the company with a notice demanding an alleged tax liability of
Rs 11,139 crore.
This substantial tax claim, rooted in the gross bet value of all casino games played over a five-year span, has cast a shadow over Delta Corp’s financial landscape. Moreover, this development comes on the heels of the GST Council’s decision in July to impose a 28% tax on various segments, including online gaming, casinos, and horse racing.
Delta Corp ,Details of the Tax Notice:
Delta Corp Ltd finds itself in a precarious situation as it grapples with a formidable tax notice. The notice, issued by the Directorate General of GST Intelligence, Hyderabad, demands the company to remit an alleged tax liability of INR 11,139,610,342,300 (Rupees Eleven Thousand One Hundred and Thirty-Nine Crore Sixty-One Lakh Three Thousand Four Hundred and Twenty-Three) along with interest and penalties. This tax obligation pertains to the period spanning from July 2017 to March 2022. Failure to meet this financial demand would result in the issuance of a show cause notice under Section 74(1) of the CGST Act, 2017 and Goa SGST Act, 2017.
The Basis of the Tax Claim: Delta Corp has asserted that the notice is rooted in the gross bet value of all casino games played during the specified five-year duration.
The company points out that the demand is related to GST on the gross bet value, rather than the gross gaming revenue. Notably, this issue has been a subject of industry-wide concern, with various representations already made to the government to address this matter.
Delta Corp’s Response and Legal Action: In response to the tax notice, Delta Corp has taken a resolute stance. The company has been legally advised that the DG Notice and the corresponding tax demand are arbitrary and contrary to law. As a result, Delta Corp intends to vigorously pursue all available legal remedies to challenge this tax demand and associated proceedings.
About Delta Corp: Delta Corp, initially established in 1990 as a textiles and real estate consultancy company, has since evolved into a diverse conglomerate. It currently operates in various segments, including casino gaming (live, electronic, and online), online gaming, hospitality, and real estate.
Market Reaction: On the day this news broke, Delta Corp’s stock on the BSE remained largely unchanged, closing at Rs 175.25. However, industry experts have raised concerns about the uncertainty this development introduces to the investment climate, particularly in the online gaming sector. Delta Corp CFO, Hardik Dhebar, emphasized the importance of regulatory clarity for the investing community in this sector.
Ongoing Industry Challenges: This latest tax notice compounds the challenges faced by casinos and online gaming companies in the wake of the government’s decision to impose a 28% GST rate on turnover for these entities. The move, implemented by the GST Council in July, has cast a shadow over the sector and raised concerns among potential investors.
Delta Corp finds itself in a precarious financial situation, contending with a substantial GST tax claim amidst ongoing regulatory challenges. The outcome of this matter will have far-reaching implications not only for the company but also for the broader casino and online gaming industry in India.