Shares of Delta Corp surged to a five-month high on the anticipation that the GST Council might eliminate the retrospective tax demands. This boost came after reports hinted at possible amendments to the CGST Act to address the concerns of the gaming industry regarding taxation. Delta Corp’s shares saw a remarkable increase of over 12 percent at 1 pm, while Nazara Tech also experienced a surge in early trade. In the last month, Delta Corp’s stock prices soared by 23 percent, and Nazara’s by 40 percent.
The gaming industry has been advocating for a more favorable taxation framework, suggesting that taxes should be based on Gross Gaming Revenue (GGR) rather than the full face value. The upcoming GST Council meeting on June 22 is expected to deliberate on a recommendation to amend the Act. This news follows Prime Minister Modi’s earlier statement expressing the government’s reluctance to excessively regulate the gaming industry and emphasizing the need for a balanced approach to address its challenges.
https://taxconcept.net/markets-news/nazara-technologies-posts-31-rise-in-net-profit/Read more: Nazara Technologies posts 31% rise in net profit
The industry faces pending petitions in the Supreme Court, with 30 online real money gaming companies contesting retrospective GST notices seeking substantial dues calculated at 28 percent of the face value of bets. These companies have expressed intentions to approach the new government after the general elections, seeking a reduction in Goods and Services Tax (GST) and proposing the computation of tax based on Gross Gaming Revenue (GGR) instead of the full face value. This proposal stems from the belief that the current high tax rate is unsustainable for startups in the sector.
Since October 2023, online gaming has been subjected to GST based on the full face value rather than GGR. This change has led to a significant surge in revenue from online gaming, increasing by 5-6 times from Rs 200 crore to Rs 1100 crore per month.
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