PANAJI
Wednesday's next-gen GST reforms announced by the GST Council may have brought a cheer to several segments of the commercial world but not for the thriving casino industry in Goa where sources have admitted it has sent top management executives to the drawing room to assess its impact on operations and financials.
The GST Council has introduced a new upper limit slab of 40% for luxury and demerit services. The 40 per cent tax will apply on admission to IPL matches, casinos, lotteries, betting, horse racing, gambling, and online money games.
Delta Corp chairman Jaydev Mody was reported in the national media saying that the 40% GST will make the entire sector unviable. “It will affect thousands of jobs, affect visitation to the state, will negatively affect revenue collection and make redundant all the capex that has been incurred by the industry,” he added.
Shares of Delta Corp tumbled 8 per cent in Thursday's trade after the GST Council’s announcement. Delta Corp is the only listed company engaged in the casino -- live, electronic and online) gaming industry in India. It is also reported that Delta Corp has announced a temporary halt on its ambitious Rs 2,000-2,500 crore integrated resort-cum-casino township at Mopa.
Sources in the industry here in Goa told The Goan that the higher tax of 40% will have an impact on the overall footfalls.
The impact could be severe for the lower bracket of our clientele. It may not impact that much the footfalls of the premium segment," the top executive of one of the off-shore casino firms said. He did not wish to be identified because he was not authorised to talk to the media.
Several of the casino companies are already facing massive tax demands from the Central Excise under GST and have legally challenged it before the jurisdictional courts.
BSE and NSE listed Delta Corp which operates casinos under the 'Deltin' brand was slapped a retrospective demand of Rs 33,500 crore GST but the company has challenged it before the Supreme Court of India where arguments are heard and a judgement is expected.
The retrospective GST demand is for the period between July 1, 2017, and March 31, 2022 and in addition to its argument that earnings are only a fraction of the waged amount as against the Central Excise evaluation that gross bet value is GST chargeable, Delta Corp has also raised constitutional questions in the matter being heard by a division bench of the Apex Court comprising Justices JB Pardiwala and R Mahadevan.
The judgement in the matter which is reserved is expected to throw clarity on whether the GST is chargeable on the total bet amount placed by players -- gross bet value (GBV) -- or as the casino operators claim it should be on their actual earnings -- gross gaming revenue (GGR).
