Indian gaming operator Delta Corp said in a Sunday filing that it has been granted a temporary stay by the Sikkim High Court on a GST demand notice from the Directorate General of GST Intelligence, Hyderabad for payment of Rs 628 crore (US$75.5 million) in back taxes allegedly owed for the operation of Casino Deltin Denzong, based out of Sikkim.
“Pursuant to a writ petition filed by the Company before the Honorable High Court of Sikkim challenging the above demand, the Honorable High Court has by its order dated 20th October 2023 ordered status quo to be maintained in respect of the demand until the date of next hearing,” Delta Corp said in its filing.
The GST demand is one of a number of similar back tax demands from various government agencies totaling more than Rs 23,200 crore, equivalent to around US$2.8 billion. To put that into context Delta Corp’s total market cap currently stands at around US$420 million.
Delta Corp was also issued with show cause notices on 11 October for an alleged shortfall in its GST payments for the period from 1 July 2017 to 31 March 2022 or Rs 16,823 crore (US$2.02 billion), and another demand three days later from Directorate General of GST Intelligence, Kolkata for payment of Rs 6,384 (US$768 million).
The reason for such sizeable claims, Delta Corp said in a previous filing, is that it is “based on the gross bet value of all games played at the casinos during the relevant period,” not dissimilar to recent moves by India’s GST Council to slap a 28% tax on gaming deposits for operators nationwide.
“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,” Delta Corp explained.
“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.”
Delta Corp operates India’s two largest offshore casinos, Deltin Royale and Deltin JAQK, and the country’s only floating hotel with a casino, King Casino, all located in Goa. It also owns and operates the Deltin Suites in Goa and Casino Deltin Denzong in Sikkim, as well as the 176-room five-star hotel The Deltin in Daman. In FY23 it started operation of “Deltin Zuri” – which it describes as the only luxurious land-based casino in South Goa.
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