Delta Corp has received additional notices of claimed Goods and Services Tax (GST) shortfalls totaling Rs 6,384 crore, according to a regulatory filing by the casino network operator on October 14.
”The amounts claimed in the notice are inter alia based on the gross bet value of all games played during the relevant period. Demand of GST on gross bet value, rather than gross rake amount, has been an industry issue and various representations have already been made to the Government at an industry level in relation to this issue.,” the company said in the filling.
The notice also advised that the CEO & Executive Director of Deltatech Gaming Limited will be liable for ”penalty under Section 122(3)(a) of the CGST Act, 2017 read with the West Bengal GST Act, 2017”, the notice read.
”Company and its subsidiary will pursue all legal remedies available to them to challenge such tax demands and related proceedings,” the company asserted in the regulatory filling.
Earlier, Delta corp had received a similar notice from the government – on 22nd September – to pay tax of $1.34 billion along with interest and penalty for the period July 2017 to March 2022.
After receiving the previous notice the company’s stock had tanked by 15 per cent within one hour of stock market opening on 25th September, which was the next trading session, hitting the lower circuit for that day.
While global investors have urged PM Modi to review the 28 per cent gaming tax, citing an adverse impact to prospective investments of about $4 billion, the country’s revenue secretary had clearly said there was no need to rethink the tax.
On the other hand, gaming companies have started feeling the impact of the new 28 per cent GST tax and gaming app Mobile Premier League last month said it would lay off 350 employees to “survive” the tax.
Indian casino operator Delta Corp reported a marginal 1.7 per cent rise in second-quarter profit on 11 October, helped by a fall in tax expenses. The Pune-based firm’s consolidated net profit for the quarter ended Sept. 30 rose to 694.4 million Indian rupees ($8.35 million) from 682.5 million rupees a year earlier, it said in an earlier exchange filing.
The company’s tax expenses in the quarter fell 7.4 per cent, making way for profits as total revenue stayed flat with a 0.2 per cent rise to 2.71 billion rupees.
Revenue from its key casino gaming division was up 3.4 per cent, while its revenue from its smaller online skill gaming division – which includes poker and rummy games – fell nearly 14 per cent.