India’s Delta Corp has suspended construction of a US$285 million integrated resort project in Goa until it receives more clarity on moves to increase the GST charged on bets placed to 40% and retrospectively claim back taxes.
The project, first announced in 2020, had been scheduled to open in 2027 in the state’s north and comprise a casino plus hotels, a convention center, multiplex cinema, retail area, water park and other facilities.
According to a report by Times of India, Delta Corp will keep the IR development on hold until ongoing court proceedings in relation to the tax issues are resolved.
“The 40% GST contemplated will make the entire sector unviable,” said Delta Corp chairman Jaydev Mody. “It will affect thousands of jobs, reduce visitation to the state, negatively impact revenue collection and render past industry investments redundant. Our integrated resort, which would have created direct employment for 10,000 people, will remain on hold until all GST issues are clarified.”
Such taxes would also render existing investments, including Delta Corp’s onshore and cruise ship casino operations in Goa and Sikkim, untenable, Mody added.
“The question of investing in either of the two states does not arise with this uncertainty,” he said. “On the one hand, there is the retrospective GST demand from the department, and on the other, there is a prospective GST hike to 40%.”
As previously reported by Inside Asian Gaming, various government agencies have issued claims for back taxes totalling a whopping US$2.8 billion – those orders coming at a time when the company’s market cap stood at around US$420 million.
Delta Corp has stated in past filings that the reason for such sizeable claims is that they are “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,” Delta Corp has said.
“The Company has been legally advised that 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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