Casino operator Delta Corp subsidiary, Deltatech Gaming has received a tax shortfall notice from Goods and Services Tax (GST) authorities worth Rs 6,384 crore, the company informed the exchanges on Saturday.
Deltatech Gaming, formerly Gaussian Networks, operates several online gaming apps such as Adda52, Adda52Games and Adda52Rummy.
With the recent tax notice, Delta Corp’s total tax shortfall liability stands at Rs 23,206 crore. On September 22, the company had received a GST liability notice of Rs 11,140 crore, and its three subsidiaries — Casino Deltin Denzong, Highstreet Cruises, and Delta Pleasure Cruise — received notice worth Rs 5,682 crore.
The amounts claimed in the notice sent to Delta Gaming are inter-alia based on the gross bet value of all games played during the relevant period (July 2017-November 2022), its parent company said in an exchange filing.
“Demand of GST on gross bet value, rather than gross rake amount, has been an industry issue and various representations have already been made to the government at an industry level in relation to this issue,” it said.
In recent months, online gaming firms such as Delta Corp, Dream Sports (parent of Dream 11), Games24x7, Head Digital Works, and GamesKraft have jointly received a GST payment demand of over Rs 1.1 trillion since August 2017 till June 2022, according to industry sources.
This is almost five times the collective revenue of these companies between FY19 and FY22, which comes to Rs 20,929 crore.
The huge tax burden is a result of a difference in interpretation of tax laws. Till recently, online gaming firms had been paying 18% GST on the platform fee — the commission they charge from participants entering a game. They had also been differentiating between games of chance and skill.
The government has, however, maintained that the GST rate on gaming was always 28% on the full face value, and there is no distinction between games of chance and skill.
Last week, revenue secretary Sanjay Malhotra had said, “Certain members (in the 52nd GST Council meeting) had raised the issue of retrospective taxation. It was informed to them that this is not retrospective, and this was the law earlier.”
“These liabilities already existed…they were already attracting (28% GST) by way of betting or gambling,” he said to reporters at the press-briefing post the 52nd GST Council meeting.
The GST Council in its meetings in July and August had decided to clarify the levy of 28% GST on full face value of bets placed on online gaming platforms and horse racing and casinos.
The amendments to the Central GST Act and Integrated GST Act were passed by the Parliament, came into effect through a notification from October 1.
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