Delta Corp Faces Additional GST Notice of Rs 6,384 Crore, Total Tax Shortfall Reaches Rs 23,206 Crore

Delta Corp, the prominent casino chain, has recently disclosed that its subsidiary, Deltatech Gaming, received a notification for a shortfall tax payment amounting to Rs 6,384 crore. Deltatech Gaming, previously known as Gaussian Networks, is responsible for operating gaming apps such as Adda52 and Addagames.

In an official exchange filing, the company stated, “The GST notice advises Deltatech Gaming Limited to pay the alleged tax shortfall along with interest and penalty failing which a show cause notice will be issued to the Company under Section 74(1) of the CGST Act, 2017.”

This latest tax notice adds to Delta Corp’s overall tax liability, which now reaches a substantial Rs 23,206 crore. In contrast, Delta Corp’s market capitalization stands at Rs 3,749 crore.

Back on September 22, the company had received a direct tax notice of Rs 11,140 crore. Additionally, another notice of Rs 5,682 crore had been issued against three of its subsidiaries: Casino Deltin Denzong, Highstreet Cruises, and Delta Pleasure Cruises.

Delta Corp emphasized that the amounts stated in all the notices are calculated based on the gross bet value of games played.

The demand for GST on the gross bet value, instead of the gross rake amount, has become an industry concern, leading to various representations made to the Government at an industry level regarding this matter.

Casinos and online gaming companies are grappling with the GST council’s decision to impose a 28 percent tax on the full face value of chips acquired for gaming. This implies that players receive only Rs 72 to bet for every Rs 100 worth of chips purchased, in contrast to the previous practice where GST was charged solely on net house winnings.

In response to these challenges, Delta Corp had earlier announced the postponement of its initial public offering (IPO) plan for Deltatech Gaming.

For the quarter ending September, the company reported a 1.6 percent year-on-year increase in consolidated net profit, amounting to Rs 69.4 crore. The company’s revenue showed a marginal rise to Rs 270.6 crore in Q2 FY24, compared to Rs 270 crore in Q2 FY23.