Govt seeks Rs 1,752 crore from Delta Corp for GST short payment

Panaji: Goa govt has issued a GST tax notice to Delta Corp Ltd and its subsidiary, Highstreet Cruises and Entertainment Pvt Ltd, demanding Rs 1,752 crore for short payment of GST for the financial year 2022-23.

The office of the commissioner of commercial taxes issued the tax demand this week. Delta Corp disclosed the development to stock exchanges to meet the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

The commercial taxes department has demanded Rs 1,350.3 crore from Delta Corp for alleged tax shortfall, interest, and penalty. Simultaneously, Highstreet Cruises and Entertainment Pvt Ltd, which operates offshore casino vessels in Goa, has been served a separate demand of Rs 402.1 crore on similar grounds. Together, the two demands add up to Rs 1,752.4 crore.

At the heart of the dispute is the basis on which GST is being levied. The tax authorities have calculated the alleged shortfall on the gross bet value of all games played at the casinos during the relevant period, that is, the total value of every bet placed.
“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 govt at an industry level in relation to this issue. The company and its subsidiary have challenged earlier similar demands relating to the period from July 2017 to March 2022. Supreme Court has stayed further proceedings of all the impugned notices for the period from July 2017 to March 2022 until the final disposal of the petitions before it,” said Delta Corp’s company secretary and vice president (secretarial) Dilip Vaidya.

Delta Corp has said that taxing the gross bet value rather than gross gaming revenue is an industry-wide issue and that representations have already been made to the govt at the industry level to resolve this fundamental question of GST applicability.
This is not the first time Delta Corp has faced such demands. The company and its subsidiary have previously challenged similar GST notices covering the period from July 2017 to March 2022.

“The company and its subsidiary have been legally advised that the above notices and the tax demands are arbitrary and contrary to law, and the company and its subsidiary will pursue all legal remedies available to them to challenge such tax demands and related proceedings,” said Vaidya.

The outcome of Supreme Court proceedings is expected to be decisive not just for Delta Corp but for the entire casino industry in India, given that the gross bet value versus gross gaming revenue question remains unresolved at the highest judicial level.