Delta Corp Wins GST Challenge as High Courts Rule in its Favor

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Delta Corp, a well-known brand in the gaming and casino industry, has been facing a significant challenge related to Goods and Services Tax (GST) in recent weeks. The company and its subsidiaries have been issued tax notices amounting to a staggering INR 23,206 Crores by the Directorate-General of GST Intelligence (DGGI). This amount is astonishingly seven times the company’s current market capitalization. In response to these tax notices, the company has taken legal action and achieved two crucial judicial victories in its favor.

The Bombay High Court in Goa has directed the Central and State governments, as well as GST officials, to respond to Delta Corp’s objections regarding the GST notices. The bench, consisting of Justices MS Sonak and Bharat Deshpande, issued a directive instructing the DGGI to refrain from finalizing any decisions related to the GST notices seeking compensation for the alleged tax deficit without obtaining approval from the court.

Additionally, the Sikkim High Court issued a stay order on the INR 628 Crore GST demand from the DGGI, which was linked to Delta Corp’s Casino Deltin Denzong in Sikkim. Justice Bhaskar Raj Pradhan, presiding as a sole judge, directed the tax department and other parties to maintain the existing state of affairs regarding the preliminary warning notice.

The Bombay High Court in Goa is set to review the case in February 2024, while the Sikkim High Court has scheduled a potential reevaluation of the ongoing issue for December 5.

The GST challenges faced by Delta Corp stem from the 28% tax imposed by the GST Council on initial deposits on online gaming, casinos, and horse racing. This tax, which was approved by Parliament on August 11, and enforced by the Union government on October 1, has resulted in substantial financial obligations for the company.

The company received notices from the DGGI Hyderabad requesting outstanding GST payments, with amounts totaling INR 11,140 Crores for Delta Corp and INR 5,682 Crores for its subsidiaries. These actions increased the firm’s liabilities to INR 16,822 Crores. Furthermore, another subsidiary, Deltatech Gaming Limited, faced a GST notice of INR 6,384 Crores, bringing the total outstanding liability to INR 23,206 Crores.

Despite these challenges, the recent judicial developments in favor of Delta Corp offer a glimmer of hope amidst the ongoing GST turmoil. The company continues to navigate these issues with the support of the legal system as it seeks resolution.