India's Delta Corp Suffers Additional, Massive GST Claims

October 17, 2023
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India’s goods and services tax (GST) authority has demanded 63.8bn rupees ($767m) in unpaid tax from casino operator listco Delta Corp’s online gaming subsidiaries, raising the parent’s GST bill to $2.8bn and further sinking company shares.
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India’s goods and services tax (GST) authority has demanded 63.8bn rupees ($767m) in unpaid tax from casino operator listco Delta Corp’s online gaming subsidiaries, raising the parent’s GST bill to $2.8bn and further sinking company shares.

The Directorate General of GST Intelligence (DGGI) on Friday (October 13) issued delinquent tax notices of 62.4bn rupees and 1.5bn rupees to Delta Corp online gaming arm Deltatech Gaming, according to a parent company filing on Saturday to the National Stock Exchange of India.

The notices, the latest in a series of overwhelming, gaming volume-indexed claims against online and land-based gaming companies, lifted Delta Corp’s total GST exposure to around 232bn rupees and pushed company shares down to a three-year low.

Deltatech Gaming, formerly known as Gaussian Networks prior to Delta Corp’s acquisition of the skill gaming company in 2016, runs the prominent websites Adda52 for poker, Adda52rummy and fantasy sports site addagames.

The two claims against Deltatech Gaming were not linked to specific sites in the filing, with each referring to roughly overlapping periods between January 2018 and November 2022.

The DGGI also warned that Deltatech Gaming CEO and executive director Shivanandan Pare is “liable for a penalty” over the GST shortfall under central and state law.

As with the DGGI’s earlier claim against Delta Corp’s casinos in Goa and Sikkim and against cruise liners it operates, the parent company said it would not accept the demands.

“The Company and its subsidiary have been legally advised that the above notice and the tax demands are arbitrary and contrary to law, and the Company and its subsidiary will pursue all legal remedies available to them to challenge such tax demands and related proceedings,” it said.

The massive, potentially catastrophic GST notices for Delta Corp and at least 140 online gaming companies, such as Gameskraft Technologies and Dream11, amount to an endgame manoeuvre by anti-gaming elements in the central government.

The Supreme Court of India has agreed to hear the government’s case against a Karnataka High Court order blocking collection of GST without distinguishing between skill and chance games.

However, the DGGI has leapt on the apex court’s stay of the high court order ahead of its own hearings, resulting in a slew of aggressive, industry-imperilling GST claims.

Meanwhile, fantasy sports company Dream Sports, whose Dream11 platform is one of the most powerful gaming operations in India, will shut down its two-year-old venture arm Dream Capital over GST damage to group revenue, the Economic Times reported on Friday.

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