Court challenges Indian tax department on casino license fees

The High Court of the Indian city of Mumbai has asked the tax department of Goa to submit an explanation on why it charges a service tax on casino licence fees. Goa is one of the few Indian states where gambling is legal. The Goan indirect tax department had issued notices to casinos earlier ordering them to pay a state license fees.

The casino owners challenged the decision on the court, arguing that the fees had no legal ground. Abhishek A Rastogi, partner, Khaitan & Co, filed a petition with the Goa bench of the high court in which he argued that licence fees are a statutory levy.

“Demanding tax on statutory license fees is absurd. It’s like demanding a tax on passport fees paid to the government. Based on a circular, the DRI has initiated an investigation for applicability of service tax,” said Rastogi, who explained that as they’re not rendered by the state government, they’re not required.