Indian casino operator Delta Corp has stated that its subsidiary, Deltatech Gaming, received a notice from the Directorate General of GST Intelligence, demanding payment for a tax shortfall of Rs 6,384 crore.
“Deltatech Gaming Limited, a subsidiary of the Company has received an intimation for payment of shortfall tax under Section 74(5) of the CGST Act, 2017 and West Bengal GST Act, 2017, from the Directorate General of GST Intelligence, Kolkata, on October 13, 2023,” the parent company informed in an exchange filing.
What does Deltatech Gaming do?
Deltatech Gaming, formerly known as Gaussian Networks, runs gaming apps like Adda52 and Addagames.
“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,” the company said.
The notice also stated that the CEO and Executive Director of Deltatech Gaming, responsible for its daily operations, is liable for a penalty under Section 122(3)(a) of the CGST Act, 2017 read with the West Bengal GST Act, 2017.
Delta Corp continues to face trouble from the Tax dept
With this notice, Delta Corp now has a total tax shortfall liability of Rs 23,206 crore. This is stark compared to its market capitalisation of Rs 3,749 crore.
On September 22, The company received a tax notice of Rs 11,140 crore. Additionally, three of its subsidiaries – Casino Deltin Denzong, Highstreet Cruises, and Delta Pleasure Cruises – were issued another notice for Rs 5,682 crore.
According to the company, the amounts claimed in all notices are based on the gross bet value of games played.
Casinos and online gaming companies are struggling with the GST council’s decision to impose a 28 % tax on the full face value of chips purchased for playing, meaning players can bet only Rs 72 for every Rs 100 worth of chips purchased. Previously, GST was charged only on net house winnings.