India’s casinos and online gaming platforms have been sent show-cause notices for the payment of a combined US$12 billion in unpaid goods and services tax, all related to the 2018 financial year, according to Indian business and financial news outlet Mint.
The figure was provided by a government official, who also admitted that recovery of the allegedly overdue taxes will come down to how courtrooms around the nation rule on the taxation matter.
As reported by Inside Asian Gaming, India’s GST Council recently implemented a 28% tax on the total value of chips purchased, deposits made or bets placed – rather than on gross revenues – for casinos, online gaming and horse racing.
Leading casino operator Delta Corp has also been sent various GST demands totalling more than Rs 23,200 crore (US$2.8 billion) – more than six times the company’s total market cap – but has been granted stays by two judges until the matter is heard.
Mint noted in a weekend report that one online operator, Gameskraft Technologies Pvt Ltd, had already secured a favourable order from the Karnataka high court in May on the levy of a 28% GST, although that order has also been stayed by the Supreme Court following an appeal by the government.
“In the case of online gaming, one case has been decided by the Karnataka high court,” the official told Mint in reference to the Gameskraft Technologies case. “That matter is before the Supreme Court. They will be deciding on the core issue. The recovery (of the tax demand) will depend on the outcome of court cases.”
In announcing last week that it had been granted a 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), Delta Corp outlined its belief that such demands were unconstitutional,
“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,” it said.
“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.”
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