PANJIM: The State government on Wednesday granted its nod for casino operations in the State to recommence from November 1. However, the issue on payment of annual fees remains unsettled.
Chief Minister Dr Pramod Sawant said the cabinet has granted approval for casino operations. He said the Home Department will issue SOPs to be followed in terms of social distancing and so also the capacity allowed. Initially they will have to work with 50 per cent the actual capacity, he said.
On the collection of fees, the Chief Minister said that the operators will have to pay the fees at the start of every month now.
While the government has cleared the reopening of casinos, the issue with regard to the annual fee is yet to be sorted.
The total revenue on account of annual recurring fee (ARF) for the Financial Year 2020-2021 is Rs 350 crore and as the casino licensees failed to pay the prescribed advance ARF, the government directed them to pay the ARF for the period from April 1, 2020 to March 31, 2021.
Instead of paying the advance ARF, casino licensees (Delta Pleasure Cruises Company Pvt Ltd, Delta Corp Limited, Highstreet Cruises and Entertainment Pvt Ltd, etc) made representations to the government seeking exemption from the payment of ARF for the financial year 2020-2021, and other concessions, relaxations etc, with the submission that due to the Covid-19 pandemic their business has been shut from March 15, 2020.
“Apart from salaries they have other fixed costs whereby vessels, feeder boats, jetties need to be maintained, staff quarters and meals continue to be provided, office rent and jetty usage fees have to be paid. It is submitted by them that during the period of lockdown they have been paying salary without any revenue being generated as a result of which working capital has depleted and they are facing a huge cash crunch,” the casino representation says.
The casino licensees have further said that they are not in position to pay ARF at this time and have demanded pro rata waiver of ARF for the financial year 2020-21 in light of the fact that the casinos were not allowed to operate for the period from March 16, 2020.
They also demanded they be allowed payment of ARF on monthly basis instead of the current practice of payment for the entire year in advance.
Following the requests, Home Department commented that “such a waiver would mean foregoing of revenue”. “If casinos begin operations from November, the total loss of revenue for the financial year would be Rs 204.16 crore,” the Home Department noting says.
Also, the Home Department noted that the casino sector cannot be seen in isolation and affording such relaxations may result in other sectors demanding similar pro rata waivers.
“This change in the nature of fee structure can result in demands from other sectors for an instalment based payment system for government dues. For the above said reasons, the department does not recommend to consider the request,” it said.
On request for 50 per cent reduction in the ARF, Home Department’s comment states that currently restaurants, hotels are operating at 50 per cent capacity in light of the guidelines.
“If this request is considered in isolation then the financial implications of the waiver would be Rs 175 crore (50 per cent of the ARF due). If this request is considered in addition to that listed at para 10(a) then the combined financial implications for the waiver would be Rs 277.08 crore. The resultant revenue from ARF for this financial year would thus only be Rs 72.92 crore as against Rs 350 crore. For the above said reasons, the department does not recommend to consider the request.”
