Directorate of Revenue Intelligence Launches Investigation Targeting Indian Casinos

Gambling is banned throughout most of India and Goa is the only state in the country to have a regulated casino industry. Goa is one of the biggest tourist hubs in the country for both domestic and international tourists and one of the main attractions in the casino industry.

DRI Launches Investigation

The Directorate of Revenue Intelligence (DRI) announced this week that it has launched an official investigation into the 10 casinos that operate in Goa. The investigation was launched over suspicions that these ten casinos have been evading paying their respective service tax. The DRI sent across a notice to these 10 casinos informing them that they have to pay up service taxes from 2014 to 2016 and the service tax rate that would be imposed is 15 percent.

The casino industry in Goa has constantly been put under pressure for a number of reasons and there is a strong push to ban all forms of gambling in Goa. A few of the casinos that received the DRI notice gave into the pressure and ended up paying the ‘service tax’. However, a number of casinos decided against giving into these demands and have approached the court to fight the charge.

Casinos Claim No Legal Basis For Charges  

The common man has been forced to pay taxes on just about everything under the rule of the current BJP government. So many new tax laws have been imposed under the current Central Government that it has become far too complicated for the common man to understand the tax system – all he knows is that he pays tax on everything.

The Casinos are voicing similar concerns and the lawyer fighting the case for the casinos has filed a petition in the Bombay High Court stating that it is absurd to ask the casinos to pay tax on statutory license fees. The casinos pay the government a licensing fee to keep business open each year and paying taxes on their licensing fee is like asking citizens to pay the government taxes on their passport fee application.

Deloitte India has also expressed surprise at the new taxation being imposed on the casinos. In a statement, M S Mani, a partner at Deloitte India said “Many casinos have paid service tax on reverse charge basis and hence should not be expected to pay any other indirect tax. Further, since entertainment tax has been subsumed in GST, similar issues may not arise in future.”