Team Herald
PANJIM: The ‘Directorate General of GST Intelligence’ (DGGI) has taken up an investigation on non-payment of service tax on ‘Annual Recurring Fee’ paid by casino licence holders in Goa.
DGGI is the Apex Intelligence & Investigation wing of Indirect Tax Department concerned with evasion of GST, Central Excise & Service Tax.
With reference to this, the DGGI clarifies on a report “Why Put GST on Casino Licence Fees, Bombay HC asks Tax Department”, that appeared in the media.
The article had stated that “some of the Goan casinos have filed writ petitions” which is incorrect. The writ petition has been filed by only Goan Hotel Realty Pvt Ltd which is running ‘Strike Casino’. Post investigations initiated by DGGI, other entities like Casino Pride, Neo-Majestic, Deltin Jaqk, Deltin Royale, O Hotel Casino have accepted their liability and have started paying their tax dues . This tax is payable under reverse charge mechanism, as per the GST law. Casinos at Marriott and Zuri have been paying their tax dues on the ‘Annual Recurring Fee’ even before DGGI took up the investigations.
The article is given to understand that the High Court has questioned the taxability on casino licence, which is incorrect and false. In their submission before the High Court, Goan Hotel Realty Pvt Ltd relied on the Delhi High Court order in the case of Jagatjit Industries Lid V UOI, wherein reference was made to a letter issued by the Tax Research Unit (TRU) of the Department of Revenue, to Joint Commissioner, GST, East Delhi. That letter of TRU is in respect of levy of Service Tax on licence fee and application fee by whatever name called for liquor for human consumption. Thus that letter of TRU has no bearing on this case.
In the present case, the High Court of Bombay at Goa in its order dated September 4, 2018 has nowhere questioned the leviability of service tax on casino licence fee and the court has only asked the Indirect Tax Department & other respondents to submit their reply on petitioners’ contentions.
The article states that Tax Department notice seeks dues for 3 years – from 2014 to 2016, which is wrong. DGGI has not issued any notice and has only sought the data via letter from all casinos running in Goa regarding compliance & payment of Service Tax on the ‘Annual Recurring Fee’ from the period April 2016 onwards, since all Services provided by Government became taxable only with effect from April 1, 2016.
