Casino operator Delta Corp has received tax notices totalling Rs 16,822 crore from the Directorate General of GST Intelligence on Friday. This demand is for the period between July 2017 and March 2022.
The first notice, for Rs 11,140 crore has been raised directly against Delta Corp. The other notice, for Rs 5,682 crore has been raised against three of its subsidiaries — Casino Deltin Denzong, Highstreet Cruises and Delta Pleasure Cruises.
In an exchange filing, released close to midnight, Delta Corp claims that this GST demand is based on gross bet value and not gross gaming value. It plans to pursue legal remedies to challenge this order. It has also pointed out that such tax demands are not a company-specific problem, but an industry-wide phenomenon.
The crux of the matter revolves around the taxation of the gross bet value generated from casino operations, as opposed to the more commonly used metric of gross gaming revenue.
This specific point has been a contentious issue within the industry, and multiple representations have already been made to the government on an industry-wide basis to address this concern.
However, Delta Corp has sought legal counsel and has been advised that the notice and accompanying tax demand are arbitrary and in violation of established laws.
In response, Delta Corp Ltd has expressed its intention to exhaust all available legal remedies to challenge the tax demand and associated proceedings.
Shares of Delta Corp ended little changed on Friday at Rs 175.25.