India Looks at Goa’s Largest Casinos for Tax Issues

Goa casinos continue to be in the news, this time with tax evasion issues instead of a casino license situation. India’s tax agency is looking at ten of the largest casinos operating in Goa. Goa is the only location that allows gambling legally, for right now. Other states have considered changing their laws for the gaming revenue, but nothing has been accepted by government officials—yet. The tax agency is looking at these casinos because they believe them to be evading service taxes, according to the Economic Times of India.

Tax representatives at the Directorate of Revenue Intelligence “knocked” on the doors of the ten casinos asking for the companies to pay their service taxes on the licensing fees. The DRI says the casinos did not pay on the fees from 2014 to 2016. They claim the law states the casinos are supposed to pay a 15 percent tax on the fees. Goa has six land-based casinos and several floating casinos. The land locations are five-star hotel casinos, where only visitors from other states can visit.

Only one or maybe two operators have given in to the demands of the DRI. The others are lodging petitions with the Bombay High Court to challenge the tax payment.

Rastogi, an attorney, is writing a petition to argue the license issue, stating there is a permit for the casino to operate and therefore no legal grounds to demand more tax.

Further Statements by Rastogi

Attorney Abhishek Rastogi states trying to get tax on a statutory license fee is incorrect. It is like asking for tax on passport fees one pays to the government. Based on the information, the DRI has started an investigation regarding the tax liability. There needs to be clarification regarding the tax, service, and license.

Tax experts are also siding with casinos saying there is no reason the government should be making such a demand. Deloitte India partner, MS Mani, says casino operators should not have to pay indirect taxes since they are already paying service taxes on reverse charge bases.

India has not been favorable towards casinos, poker, and other forms of gambling. Many of the states consider poker lacking in skill and just a game of chance. It is not surprising that the government may attempt to gain more taxes considering their position is less than favorable on gambling. Time will tell as to whether casinos will have trouble.

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