Delta Corp receives temporary stay from the Sikkim High Court on US$76 million tax claim

The Sikkim High Court has granted a temporary stay to Delta Corp, an Indian gaming company, in response to a GST (Goods and Services Tax) demand notice of Rs 628 crore (US$75.5 million) from the Directorate General of GST Intelligence, Hyderabad, regarding the operation of Casino Deltin Denzong in Sikkim.

On October 20, 2023, the Sikkim High Court issued an order maintaining the status quo with regard to the demand till the next hearing in response to a writ action submitted by Delta Corp contesting the claim.

This GST claim is one of several back tax demands, totaling over Rs 23,200 crore (about US$2.8 billion), that have been made by various government agencies. At now, Delta Corp’s market capitalization amounts to around US$420 million.

In October, Delta Corp was also sent with show cause letters, claiming a $2.02 billion (about Rs 16,823 crore) shortfall in GST payments between July 1, 2017, and March 31, 2022. Furthermore, an additional demand for Rs 6,384 crore (US$768 million) was submitted by the Directorate General of GST Intelligence, Kolkata.

The “gross bet value of all games played at the casinos during the relevant period,” which ties in with the recent decision by the Indian GST Council to impose a 28% tax on gaming deposits nationwide, serves as the basis for these significant claims.

Delta Corp has informed the government that the sector is troubled by the GST requirement on gross bet value rather than total gaming revenue, and they have lodged objections on behalf of the whole industry. The company will take all legal measures to fight the DG Notice and the tax demand since it believes they are arbitrary and unlawful.

Two of the largest offshore casinos in India, Deltin Royale and Deltin JAQK, as well as King Casino, the nation’s first floating hotel with a casino, are owned and operated by Delta Corp and are located in Goa. Additionally, they are the owners and operators of the 176-room, five-star The Deltin hotel in Daman, the Casino Deltin Denzong in Sikkim, and the Deltin Suites in Goa. “Deltin Zuri,” which debuted in FY23, is regarded as South Goa’s sole luxurious land-based casino.

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Original story by: IAG