Casino Operator Delta Corp Gets GST Demand Of Over Rs 16,800 Crore

Delta Corp., India's largest casino operator, has received a demand notice for goods and services tax of over Rs 16,800 crore.

The Jaydev Mody-promoted company received an intimation for payment of shortfall tax under Section 74(5) of the CGST Act, 2017 and the Goa SGST Act, 2017 from the Directorate General of GST Intelligence, Hyderabad, earlier on Friday, it said in an exchange filing.

Delta Corp. received an intimation to pay an alleged tax liability of Rs 11,140 crore, while three of its subsidiaries, Casino Deltin Denzong, Highstreet Cruises, and Delta Pleasure Cruises, received tax notices totaling Rs 5,682 crore.

Last month, parliament passed amendments to levy 28% GST on online gaming, casinos and horse racing. The GST Council has clarified that the tax should not be based on the total value of each bet placed, but on the total amount that the player has paid or deposited with the supplier.

Delta Corp, however, said the amount claimed in the notice is "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 was "advised" by the directorate general to pay the demand amount, along with interest and penalties, for the period of July 2017 to March 2022.

That also raises the question if the tax demand is retrospective.

The company has been legally advised that the demand notice is "arbitrary and contrary to law" and will pursue "all legal remedies available to it, to challenge such a tax demand and related proceedings", it said.

In September last year, the Directorate General of GST Intelligence had initiated proceedings against Gameskraft Technologies Pvt. for alleged evasion of tax by misclassification of its supply activity.

Gameskraft mounted a legal challenge against the demand of Rs 21,000 crore. The company won an order to quash the notice in Karnataka High Court. The Supreme Court, however, stayed the order.