Online gaming firms may get some tax demand relief; Delta Corp up 7%.
The government could soften its stance on the retro goods and services tax (GST) demand notices issued to online gaming companies, CNBC-TV18 said on February 7.
“The government realises the existential issue that gaming companies face if they have to pay GST demands raised for the period between July 2017 and March 2023,” CNBC-TV18 quoted sources as saying.
Following the development, Delta Corp surged over 7 percent from the previous close. At noon, the stock was quoting at Rs 144.85 on the NSE. Delta Corp houses the gaming platform Adda52 under its subsidiary Deltatech Gaming.
Between September and October 2023, Delta Corp was slapped with multiple GST notices for a tax shortfall of Rs 23,000 crore. Of this, Rs 6,300 crore pertained to Deltatech Gaming, on which Calcutta High Court granted an interim relief.
Casinos and online gaming companies are facing challenges due to the GST council’s decision to levy a 28 percent tax on the entire face value of chips purchased for playing. This means that for every Rs 100 worth of chips bought, the player effectively receives only Rs 72 to wager. Previously, GST was solely charged on the net house winnings.
Delta Corp has been diversifying its revenue stream. In December, the company announced foray into the real estate sector through a joint venture with Peninsula Land.
Delta Corp will invest Rs 99.99 crore in Peninsula Land, which will issue 1.5 crore equity shares and 77.27 lakh CCDs at Rs 44 to the listed gaming company.
In the December quarter, Delta Corp saw its net profit fall 59.34 percent from the previous year to Rs 34.48 crore. Its revenue fell 15.58 percent to Rs 231.74 crore.