Why Delta Corp shares will be in focus next week — explained

This may dent Indian stock market’s mood as the tax notice has come at a time when the company is already facing heat over the recent move in July by the country’s Goods and Services Tax (GST) Council to impose a 28 per cent indirect tax on the money collected by gaming companies from customers.

Details of DG notice

Delta Corp informed about the DG of GST Intelligence notice citing, “The DG Notice advises the Company to pay an alleged tax liability of INR 1,11,39,61,03,423 (Rupees Eleven Thousand One Hundred and Thirty Nine Crore Sixty One Lakh Three Thousand Four Hundred and Twenty Three) along with interest and penalty for the period from July 2017 to March 2022 , failing which a show cause notice will be issued to the Company under Section 74(1) of the CGST Act, 2017 and Goa SGST Act, 2017.”

Divulging about the details of tax shortfall raised by the DG of GST Intelligence, Delta Corp said that the company has received tax shortfall of ₹6,28,20,31,726 in connectiong to Casino Deltin Denzong, Sikkim; ₹32,89,94,41,744 tax shortfall by Highstreet Cruises and Entertainment Pvt. Ltd — a subsidiary of Delta Corp and ₹17,65,21,80,638 tax shortfall by another Delta Corp subsidiary Delta Pleasure Cruise Company Private Limited.

These notices advise the Company and/or its subsidiary to pay the alleged tax shortfall along with interest and penalty failing which a show cause notice will be issued to the Company and/or its subsidiary under Section 74(1) of the CGST Act, 2017 and Goa SGST Act, 2017.

“The amount claimed in the DG Notice is inter alia based on the gross bet value of all games played at the casinos during the relevant period. Demand of GST on gross bet value, rather than gross gaming revenue, has been an industry issue and various representations have already been made to the Government at an industry level in relation to this issue,” Delta Corp said adding, “The Company has been legally advised that the DG Notice and the tax demand is arbitrary and contrary to law, and the Company will pursue all legal remedies available to it to challenge such tax demand and related proceedings.”

“Please note that the Company has received an intimation for payment of shortfall tax under Section 74(5) of the CGST Act, 2017 and Goa SGST Act, 2017, from the Directorate General of GST Intelligence, Hyderabad,” Delta Corp said.

Delta Corp shares ended at ₹176 apiece on NSE after Friday session in the week gone by.

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Updated: 23 Sep 2023, 08:02 AM IST