• Notification Date: 25-09-2023
• Notification No: N/A

Delta Corp gets Intimation Alleging Rs 11,139-cr Tax Liability in GST

Goa-based casino operator Delta Corp Ltd on Friday said it received an intimation from the Directorate General of GST Intelligence, Hyderabad to pay an alleged tax liability of Rs 11,139 crore. Failure to pay the amount will result in a show cause notice being issued to the firm. This tax notice is another setback for Delta Corp, after the GST Council, in July, decided to impose a 28% tax on online gaming, casinos and horse racing. 

"The DG Notice advises the Company to pay an alleged tax liability of INR 1,11,39,61,03,423 (Rupees Eleven Thousand One Hundred and Thirty Nine Crore Sixty One Lakh Three Thousand Four Hundred and Twenty Three) along with interest and penalty for the period from July 2017 to March 2022 , failing which a show cause notice will be issued to the Company under Section 74(1) of the CGST Act, 2017 and Gdoa SGST Act, 2017," said the firm in a stock exchange filing. 

The amount claimed in the notice is based on the gross bet value of all games played at the casinos during a five-year period, said Delta Corp. 

"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," said the firm. 

"The Company has been legally advised that the DG Notice and the tax demand is arbitrary and contrary to law, and the Company will pursue all legal remedies available to it to challenge such tax demand and related proceedings," added Delta Corp. 

Delta Corp is engaged in the casino (live, electronic and online) gaming industry. Incorporated in 1990 as a textiles and real estate consultancy company, it has evolved into diversified segments such as casino gaming, online gaming, hospitality, and real estate. 

On Friday, Delta Corp's scrip on BSE closed trading flat at Rs 175.25. 

While global investors have urged Prime Minister Narendra Modi to review the 28% gaming tax, citing an adverse impact to prospective investments of about $4 billion, the revenue secretary had clearly said there was no need to rethink the tax. 

On the other hand, gaming companies have started feeling the impact of the new 28% GST tax and gaming app Mobile Premier League last month said it would lay off 350 employees to "survive" the tax. 

Delta Corp shares have lost about 29% since the government proposed the new 28% GST in July.