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Published: September 23, 2023
Updated: September 23, 2023

Delta Corp Faces Tax Challenge: Implications for Shareholders

Delta Corp Under the Spotlight

Delta Corp, a prominent player in India's casino industry, is set to be in the limelight next week due to a substantial tax challenge it's currently facing. The company recently disclosed that it has received a notice regarding a significant shortfall tax amounting to a staggering ₹1,11,39,61,03,423. This notice, issued by the Directorate General of GST Intelligence in Hyderabad, has put Delta Corp's financial situation in focus and has implications for its shareholders. Here, we break down the details of this development.

A Taxing Situation

The crux of the matter revolves around a substantial tax liability that Delta Corp is now expected to address. The Directorate General of GST Intelligence has instructed the company to pay this alleged tax liability, which amounts to ₹1,11,39,61,03,423, including interest and penalties. This liability spans from July 2017 to March 2022. The consequence of not complying with this directive could result in a show cause notice being issued against the company under Section 74(1) of the CGST Act, 2017, and Goa SGST Act, 2017.

Breaking Down the Tax Shortfall

Delta Corp has provided insight into the specifics of this tax shortfall. It comprises three significant components:

● Casino Deltin Denzong, Sikkim: A tax shortfall of ₹6,28,20,31,726.
● Highstreet Cruises and Entertainment Pvt. Ltd: A subsidiary of Delta Corp, facing a shortfall of ₹32,89,94,41,744.
● Delta Pleasure Cruise Company Private Limited: Another subsidiary of Delta Corp, dealing with a shortfall of ₹17,65,21,80,638.

These notices serve as a clear call for both the company and its subsidiaries to settle the alleged tax shortfalls promptly. Failure to do so may lead to further legal action under the relevant tax acts.

Industry-Wide Challenge

Delta Corp points out that the tax calculation in the DG notice is based on the gross bet value of all games played at its casinos during the specified period. This approach differs from the industry's standard practice of calculating GST on gross gaming revenue. Delta Corp has voiced concerns over this issue, emphasizing that this approach has already been a subject of industry-wide representations to the government.

A Legal Standpoint

In response to the tax notice, Delta Corp asserts that it has received legal advice indicating that the DG Notice and the accompanying tax demand are arbitrary and contrary to the law. The company is committed to pursuing all available legal remedies to challenge these tax demands and any related proceedings.

Delta Corp's impending tax challenge is poised to be a significant point of interest for investors and market observers. The outcome of this situation could have implications not only for the company but also for the broader gaming industry in India. As this matter unfolds, shareholders and industry stakeholders will be closely watching how Delta Corp navigates this taxing situation and the legal battles that may ensue. Accordingly, the coming weeks promise to be a crucial period for Delta Corp and its stakeholders.