Delta Corp shares jumped nearly 5% on January 8 as Supreme Court agreed to hear online gaming industry’s petitions against GST show cause notices on January 10.
At 12 pm, Delta Corp shares were trading 6% higher at Rs 116.43 per share.
According to a CNBC-TV18 report, the industry is seeking a stay on the show cause notices with concerns of possible coercive action by tax authorities. The industry has expressed concern, saying the issue has been pending for several years, CNBC-TV18 said.
Online gaming companies have been sent 71 show cause notices related to evasion of goods and services tax (GST) worth Rs 1.12 lakh crore in 2022-23 and the first seven months of 2023-24.
Online gaming firms have been grappling with the payment of 28 per cent GST instead of 18 per cent for the period up to October 1, 2023. While the companies argue that the 28 per cent tax applies only from October 1, the government believes that the October 1 amendment has only provided clarity to the law that was already in place.
The government’s stance is that the demand for tax dues is not retrospective in nature. In August 2023, the GST Council amended the law to clarify that from October 1, all online games, regardless of skill or chance, will attract a GST rate of 28 percent on the entire value of bets, and not on gross gaming revenue.
Following this decision, online gaming companies have been faced with hefty tax demands, which experts say will likely kill the entire industry.
