Delta Corp, India’s leading casino operator, is currently facing a substantial Goods and Services Tax (GST) demand notice issued by the Directorate General of GST Intelligence (DGGI), Hyderabad. The notice specifies an amount of Rs. 11,139 crores.
In an official exchange filing, the company promoted by Jaydev Mody revealed that it had received a notice for the payment of a deficit tax amount as per Section 74(5) of the Central Goods and Services Tax Act (CGST Act), 2017, and the Goa State GST Act, 2017. This notice was issued by the DGGI and the company received it on Friday.
Delta Corp, stated that the sum mentioned in the notice is derived from the total bet value of all games played at the casinos during the specified period. They emphasized that the request for GST based on the gross bet value, as opposed to the gross gaming revenue, has been a matter of concern within the industry. Additionally, they noted that multiple industry-level representations have already been submitted to the government regarding this issue.
The Directorate General has instructed the company to remit the requested sum, inclusive of interest and penalties, covering the period from July 2017 to March 2022. The company has received legal counsel asserting that the demand notice is unjust and in violation of the law. Consequently, it intends to explore all available legal avenues to contest this tax claim and associated legal actions.
The government has raised the GST to 28% on Online gaming, casinos and horse racing. The GST Council has clarified that the tax should not be based on the total value of each bet placed, but on the total amount that the player has paid or deposited with the supplier.
Read More: Lok Sabha Passes CGST and IGST Amendment Bill Proposing 28% GST on Online Gaming
A Bengaluru based gaming company Gameskraft has received the GST demand notice of Rs. 21,000. However, the Supreme Court has issued a stay order on the Karnataka High Court’s decision to nullify the demand notice. The Division Bench of Chief Justice of India DY Chandrachud, along with Justices JB Pardiwala and Manoj Misra, has called for a response from Gameskraft and scheduled a follow-up hearing in three weeks.
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