Delta Corp Gets Relief in GST Challenge with Bombay High Court & Sikkim High Court Acting in its Favor

In the past few weeks, Delta Corp, a leading brand in the gaming and casino industry, has been reeling under GST turmoil. The company and its subsidiaries have received tax notices from  the Directorate-General of GST Intelligence (DGGI), totaling INR 23,206 Crores, which are shockingly seven times the company’s current market capitalization. Responding to these tax notices, the company has taken a legal resort and obtained two significant judicial developments in its favor, with the Bombay High Court  intervening and the Sikkim High Court granting the company a stay.

This week, the Bombay High Court in Goa has notified the Central and State governments as well as the GST officials, asking them to respond to Delta Corp’s objections regarding the GST notices. This process was overseen by a bench comprising Justices MS Sonak and Bharat Deshpande. They issued a critical directive, asking the DGGI to refrain from finalizing any decisions related to the GST notices that seek compensation for the alleged tax deficit without obtaining approval from the court.

On Sunday, Delta Corp made an announcement stating that the Sikkim High Court had issued a suspension order on the INR 628 Crore GST demand from the DGGI, which was linked to its 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 upcoming review by the bench of the Bombay High Court in Goa is scheduled for February 2024, and the Sikkim High Court has marked December 5 for a potential reevaluation of the ongoing issue.

Delta Corp’s GST Challenges

It is worth to mention that the GST Council, in its 51st meeting, imposed a 28% tax on initial deposits on online gaming, casinos, and horse racing. The Parliament approved it on August 11, and on October 1, the Union government enforced the changes to the CGST Act 2017 and SGST Act 2017.

On September 22, Delta Corp made public that it had been served a notice by the DGGI Hyderabad, alleging a GST payment shortfall covering the period from July 2017 to March 2022.The notice asked for an outstanding GST payment of INR 11,140 Crores. Furthermore, the DGGI issued three tax notices to Delta Corp’s subsidiaries – Casino Deltin Denzong, Highstreet Cruises, and Delta Pleasure Cruises, totaling INR 5,682 Crores. These actions increased the firm’s liabilities to INR 16,822 Crores.

Later, on October 13, Delta Corp disclosed that its another subsidiary, Deltatech Gaming Limited, which operates Adda52, Adda52 Rummy, and Addagames, was slapped with a GST notice of INR 6,384 Crores.  This notice further escalated the company’s outstanding GST liability to a staggering INR 23,206 Crores, an amount that is over seven times the company’s current market capitalization.

While the GST saga continues, recent developments in Delta Corp’s favour are a huge relief.

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