Delta Corp books ₹444 crore GST provision following adjudication of earlier demands

Casino operator Delta Corp has recognised a consolidated provision of ₹443.65 crore, including interest, towards goods and services tax (GST) liabilities following adjudication orders covering its casino operations and mixed supplies, as the industry begins to reckon with the financial implications of the Supreme Court’s May 27, 2026 judgment on GST applicability to gaming, betting, gambling and casino transactions.

The provision, disclosed in the company’s September quarter results on Monday, marks a significant change from the multi-thousand-crore show-cause notices issued to Delta Corp and its subsidiaries in 2023. While the original notices alleged GST short payments running into tens of thousands of crores, the adjudication orders received for the period July 2017 to March 2022 have determined liabilities under separate categories of casino transactions and mixed supplies.

Delta Corp said it had recognised the consolidated provision as an exceptional item in its results for the six months ended September 30, 2026. The company has reserved its right to challenge the demands, particularly the entire mixed-supply demand and the interest levied on the GST liability determined under Rule 31C of the Central GST Rules.

The distinction between the original notices, amounts determined through adjudication and provisions recognised by the company is crucial. The provision reflects management’s assessment of the potential liability, including interest, and should not be read as a final settlement of all outstanding GST disputes.

From thousands of crores in notices to adjudicated demands

Delta Corp and its two subsidiaries, Highstreet Cruises & Entertainment and Delta Pleasure Cruise Company, received show-cause notices from the Directorate General of GST Intelligence, Hyderabad, on September 27, 2023. The notices alleged GST short payment aggregating ₹16,822.98 crore for the period July 1, 2017, to March 31, 2022.

Its erstwhile associate, Deltatech Gaming, received a separate notice from the DGGI, Kolkata, on October 28, 2023, alleging GST short payment of ₹6,384.32 crore for the period July 2017 to November 2022.

The company and the relevant entities subsequently approached the respective high courts and obtained stays on the proceedings covering the period from July 2017 to November 2022. The Union government had sought the transfer of similar petitions filed by the industry before various high courts to the Supreme Court.

Following the apex court’s May 27 judgment, the pending proceedings were required to be adjudicated in accordance with the principles laid down by the court and the applicable valuation provisions under the CGST Rules.

The company has since received adjudication orders determining GST demands of ₹151.15 crore for casino transactions under Rule 31C and ₹125.27 crore for mixed supplies at the consolidated group level for the period July 2017 to March 2022.

On a standalone basis, the corresponding adjudicated amounts were ₹78.56 crore for casino transactions and ₹93.80 crore for mixed supplies.

These figures relate to the specified adjudication period and categories. They are distinct from the larger provisions recognised by the group, which cover additional periods and include interest.

₹444 crore provision includes interest and subsequent periods

Delta Corp said it had calculated its GST provision for casino transactions for the period July 2017 to September 2023 and for mixed supplies for July 2017 to September 2025, based on the adjudication orders and the principles laid down by the Supreme Court.

The resulting consolidated provision, including interest, stood at ₹443.65 crore as of September 30, 2026. This included ₹306.73 crore recognised during the quarter ended June 30, 2026.

On a standalone basis, the provision stood at ₹319.60 crore, including ₹200.62 crore recognised in the June quarter.

The company said the provisions had been made on a prudent basis while reserving all rights to contest the matter before the appropriate authorities and forums.

“Based on legal advice and management's assessment, the Company believes that it has strong grounds to contest the entire demand for mixed supply and interest levied on the GST demand determined under Rule 31C,” Delta Corp said in its financial-results disclosure.

The company also disclosed that it had paid ₹80.97 crore towards the principal liability under Rule 31C, pursuant to the adjudication order covering July 2017 to March 2022, after the balance-sheet date. The standalone disclosure put the corresponding payment at ₹49 crore.

The payments relate to the principal liability determined under Rule 31C and do not, by themselves, indicate that the broader dispute, including mixed supplies and interest, has been resolved.

Fresh notices add to the tax uncertainty

The earlier adjudication orders have not eliminated Delta Corp’s exposure to further proceedings. The company and its subsidiaries also received show-cause notices from the Goa Commissioner of Commercial Taxes alleging GST short payment of ₹1,883.96 crore for the period April 1, 2022, to March 31, 2023.

The notices were issued to the company and Highstreet Cruises & Entertainment on March 17, 2026, and to Delta Pleasure Cruise Company on September 25, 2026.

The new notices cover a period subsequent to the March 2022 cut-off of the adjudication orders disclosed in the results. They therefore represent a separate part of the company’s tax exposure and should not be conflated with the ₹443.65 crore provision recognised at the group level.

The outcome of these proceedings will depend on adjudication and the application of the Supreme Court’s judgment and the relevant valuation provisions.

Tax provision weighs on September-quarter earnings

The GST-related exceptional item contributed to Delta Corp’s reported losses for the September quarter. On a consolidated basis, the company posted a loss of ₹106.41 crore for the quarter ended September 30, 2026, compared with a profit of ₹25.10 crore in the year-ago period.

Consolidated revenue from operations declined to ₹159.34 crore from ₹182.76 crore a year earlier. Profit before exceptional items and tax stood at ₹21.57 crore, against ₹34.69 crore in the corresponding quarter last year.

For the six months ended September 2026, the group reported a loss of ₹318.83 crore, compared with a profit of ₹54.56 crore in the year-ago period. The consolidated exceptional item for the half-year stood at ₹443.65 crore.