Delta Corp, the sole publicly traded gaming operator in India, has indicated that a recent ruling by the Supreme Court regarding the calculation of Goods and Services Tax (GST) for gaming operators aligns with its existing tax methodology. On May 28, Delta Corp detailed how the court’s interpretation supports the company’s current practice of calculating GST based not on the total bets placed, but rather on the revenue derived from chips sold to players. This ruling is significant as it could potentially apply retroactively to tax periods starting from July 2017 through September 2023, offering the company a more favorable tax position.
This development follows a Supreme Court decision made in May, whereby games of skill, including poker, fantasy sports, and rummy, were classified as gambling activities. The court also extended the government’s stance that taxes on these activities ought to be applied retrospectively, even prior to the GST framework updates in 2023. Importantly, the judgment stipulated that taxation should be based on the total face value of bets, a position which Delta Corp believes could be interpreted in a manner that benefits its operations.
Delta Corp had previously been challenged with a substantial tax notice from the Directorate General of GST Intelligence in Hyderabad during 2023. This notice alleged a tax shortfall amounting to Rs 11,400 crore (approximately US$1.34 billion), a sum that represented almost three times the company’s market capitalization at the time. The notice was predicated on the gross bet value of all games, rather than the gross gaming revenue, which Delta Corp contends should be the correct basis for such calculations.
In response to the ongoing tax uncertainty, Delta Corp has paused the construction of a US$285 million integrated resort project in Goa. The project will remain on hold until the company receives further clarification on the applicable GST obligations. Delta Corp currently operates notable gaming venues in India, including the offshore casinos Deltin Royale and Deltin JAQK, and other facilities such as the Deltin Suites in Goa and Casino Deltin Denzong in Sikkim. The company’s hospitality portfolio also features The Deltin, a 176-room five-star hotel in Daman. Furthermore, in the fiscal year 2023, Delta Corp expanded its operations with the launch of Deltin Zuri, a luxury land-based casino in South Goa.
The Supreme Court’s decision potentially clarifies significant aspects of GST calculation for gaming operators, which may alleviate some financial ambiguity for Delta Corp. However, the broader repercussions of this ruling continue to pose challenges. The company is particularly concerned with how these tax determinations will impact its existing operations and future development plans.
As the company awaits further regulatory guidelines, the implications of the court’s decision will likely continue to be scrutinized by Delta Corp and other stakeholders within the gaming industry. The next steps involve closely monitoring any additional directives from tax authorities that could further influence taxation mechanisms and compliance requirements for gaming operators across India.
Erik Agary is a seasoned writer at True Games Reviews, specializing in gaming, casino games, and interactive entertainment. With a passion for all things digital, Erik dives deep into the latest trends and developments in the gaming world, offering insightful reviews and detailed analysis. His expertise spans across multiple gaming platforms, ensuring comprehensive coverage that resonates with both novice and experienced gamers alike.
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