India’s largest casino operator, Delta Corp, has been served with a tax notice of Rs 16,822 crore by the Directorate General of GST Intelligence (DGGI) for the period between July 2017 and March 2022.

The notice, which was issued on Friday, is based on the gross bet value of all games played at the casinos during the relevant period. Delta Corp has said that it will challenge the notice in court, arguing that GST should be levied on gross gaming revenue (GGR) and not gross bet value.

The company has also pointed out that the issue is not company-specific, but an industry-wide phenomenon. Various representations have already been made to the government at an industry level in relation to this issue.

The GST notice is a major setback for Delta Corp, which has been facing headwinds in recent times. The company’s revenue and profits have been declining in recent quarters, due to a combination of factors such as the COVID-19 pandemic, inflation, and rising interest rates.

The GST notice could further impact the company’s finances and bottom line. If the company is unable to successfully challenge the notice, it could face a significant tax liability. This could lead to a decline in profits and a fall in the share price.

The GST notice is also a negative development for the Indian gaming industry as a whole. It raises uncertainty over the tax treatment of casinos and other gaming businesses. This could discourage investment in the sector and lead to job losses. What is the difference between gross bet value and gross gaming revenue? Gross bet value is the total amount of money wagered by players on all games at a casino.

Gross gaming revenue (GGR), on the other hand, is the total amount of money that the casino wins from its players. GGR is calculated by subtracting payouts to players from gross bet value. For example, if the total amount of money wagered by players on all games at a casino is Rs 100 crore and the casino pays out Rs 90 crore to players, the GGR would be Rs 10 crore.

Why is Delta Corp challenging the GST notice?

Delta Corp is challenging the GST notice on the grounds that GST should be levied on GGR and not gross bet value. The company argues that GGR is a more accurate reflection of the casino’s revenue and profitability.

The company also argues that levying GST on gross bet value would be unfair to casinos, as it would put them at a competitive disadvantage compared to other forms of gambling, such as online gaming and betting.

What are the implications of the GST notice for Delta Corp and the Indian gaming industry?

The GST notice is a major setback for Delta Corp and could have a significant impact on the company’s finances and bottom line. If the company is unable to successfully challenge the notice, it could face a significant tax liability. This could lead to a decline in profits and a fall in the share price.

The GST notice is also a negative development for the Indian gaming industry as a whole. It raises uncertainty over the tax treatment of casinos and other gaming businesses. This could discourage investment in the sector and lead to job losses.

It remains to be seen how the GST notice will be resolved. If Delta Corp is successful in challenging the notice, it would be a major victory for the company and the Indian gaming industry. However, if the company is unable to successfully challenge the notice, it could have a significant negative impact on the company and the industry as a whole.

1 Comment

  • Hitesh

    This is wake up call for Gaming Industry. All players have to join hands and talk to the ministry regards this.

    Reply

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