Delta Corp Faces Stock Decline Amidst New GST Regulations

Delta Corp Faces Stock Decline Amidst New GST Regulations

VoM News Desk | October 3, 2023 | 05:08 PM IST | Breaking News | Follow on Google News

Delta Corp Faces Stock Decline Amidst New GST Regulations

Delta Corp Faces Stock Decline Amidst New GST Regulations

Government’s Imposition of 28% GST on Online Gaming Impacts Delta Corp’s Shares

Delta Corp, a prominent player in the Indian gaming industry, witnessed a significant setback as the Indian government unveiled new Goods and Service Tax (GST) regulations, imposing a 28% tax rate on online gaming. This decision marked a substantial increase from the previous 18% GST rate applicable to online gaming platforms. Following the announcement, Delta Corp’s stock experienced a notable decline, closing at INR 136.90, reflecting a 4.06% decrease.

GST Overhaul and Its Implications

The altered tax landscape for online gaming results from amendments to the Central GST Act. Online gaming, casinos, and horse racing have now been categorized as ‘actionable claims,’ subjecting them to the same 28% GST rate as lotteries, betting, and gambling. This regulatory shift holds consequences not only for domestic operators but also for offshore online gambling platforms. The latter are now mandated to register in India and adhere to domestic laws by paying the 28% tax.

Delta Corp’s Taxation Challenge

In a September disclosure, Delta Corp revealed its obligation to pay a substantial tax amount of ₹16,822 crore, covering the period from July 2017 to March 2022. This obligation arose following changes made to the law by the GST Council, comprising finance ministers from both the federal government and the states. These changes added online gambling, casinos, and horse racing to the list of taxable actionable claims, clarifying that a 28% tax would be imposed on the total bet amount.

Stock Performance and Expert Analysis

The tax revisions have not only affected Delta Corp’s financial commitments but have also had a pronounced impact on its stock performance. The company’s stock has been on a downward trajectory, with experts suggesting that this trend may persist. Ruchit Jain, Lead Research Analyst at 5paisa, opined that there are no immediate signs of a reversal, indicating that the stock’s decline could continue.

Uncertain Future Outlook

As Delta Corp and the wider online gaming industry navigate the intricacies of these new tax regulations, the future remains uncertain. The company has expressed its intent to pursue legal avenues to contest the GST demand, arguing that it is based on the gross bet value rather than the gross gaming value. However, the repercussions on the company’s stock and the broader implications for the Indian online gaming sector are still unfolding, leaving stakeholders in anticipation.

VoM News Desk

VoM News is an online web portal in jammu Kashmir offers regional, National & global news.