(a) Pro rata waiver of Annual Recurring Fee (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.
Home Department’s comments:
The non-operation of the casinos was not on account of actions by the Casinos but on account of conditions imposed by the Government of Goa. It can be argued that the COVID-19 situation may be akin to a “Force Majure” condition and therefore, there may be some merit in considering the request. It may be however noted that such a waiver would mean foregoing of revenue.
The total ARF to be received for the financial year 20-21 was Rs 350 crores. Assuming that the Casinos are allowed to operate from “1 November 2020 and there is a pro-rata reduction in ARF for the 7 months of closure; that is, ARF is charged pro rata for 5 months only then, the total loss of revenue for the financial years would be Rs 204.16 crores.
Therefore, the revenue from the ARF for the financial year would be Rs 145.84 crores. The calculation details are as per the current procedure.
It may also be noted that the casino sector cannot be seen in isolation and affording such relaxations may result in other sectors demanding similar pro rata waivers.
However, it is also to be noted that some relaxations have been given in terms of extensions to multiple sectors by Government of Goa, which has effectively meant foregoing of revenue.
There is a need to strike a balance between revenue and the relaxations/waivers since continuing non operation of the casinos would entail loss of revenue.
The casino also provides revenue through GST and other indirect means, which have not been quantified here. In this regards, a policy decision may be taken.
(b) Allowing for payment of Annual Recurring Fee on monthly basis instead of the current practice of payment for the entire year in advance.
Home Department’s comments:
Considering the request would mean that the fee would effectively become a Monthly Recurring Fee. There would be financial implications on account of interest, since as per the current procedure; the money is paid upfront in advance to the government.
Also, this change in the nature of fee structure can result in demands from other sectors for an installment-based payment system for government dues.
For the above said reasons, the department does not recommended to consider the request.
(c) A 50 percentage reduction in the Annual Recurring Fee in light of the fact that the operators would have to operate at 50 percentage of the capacity.
Home Department’s comments:
With respect to the request for 50% reduction in ARF on account of the fact that casinos will have to operate at 50 percentage capacity, it is submitted that in light of the COVID-19 scenario, all businesses have to adapt accordingly.
Currently restaurants, hotels etc are operating at 50% percentage capacity in light of the guidelines.
There have been relaxations with unlock and as seen from the airline industry, it is now allowed to operate at full capacity even though like casinos, the customer is in confined space.
Moreover, the situation is dynamic, prone to change and any such reduction at this stage will invite demands from other sectors. If this request is considered in isolation then the financial implications of the waiver would be Rs 175 crores (50 percentage 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 crores.
The resultant revenue from ARF for this financial year would thus only be Rs 72.92 crores as against Rs 350 crores. For the above said reasons, the department does not recommended to consider the request.
