Delta Corp shares rise nearly 5% amid likely relief at GST Council meeting

Delta Corp shares rise nearly 5% amid likely relief at GST Council meeting

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Casino operator Delta Corp Ltd shares rose over 3 percent on September 6 over likely relief at GST Council meeting on September 9.

The Goods and Services Tax (GST) Council is set to meet in Delhi on September 9 to discuss the implementation of the newly introduced Section 11A in the GST Act, 2017, Moneycontrol reported on September 6.

The meeting will focus on interpreting the amendment of the section in a bid to grant relief to demand for retrospective tax. It will have implications for the real-money gaming (RMG) — online games where players can wager and win real money — industry and other sectors, an official said.

Delta Corp owns Adda52, which offers online games like poker and rummy.

At 11:55 am on September 6, Delta Corp's shares were trading 4.6 percent higher at Rs 137.52 apiece.

The real money gaming (RMG) sub-segment constitutes a substantial part of the online gaming ecosystem, comprising 82.8 percent of the market share in FY23, with more than 400 RMG start-ups6. Industry estimates this sub-segment to contribute around Rs 6,500 crore-Rs 6,800 crore as direct tax revenues (comprising TDS and corporate tax), and Rs 75,000-Rs 76,000 crore as indirect tax revenue (GST) to the exchequer during FY24−28E, said an EY report in December 2023.

In its 53rd meeting held in June, the council had recommended the insertion of Section 11A to regularise non-levy or short-levy of GST.

Section 11A seeks to provide a legal safeguard against punitive retrospective tax demand and potentially alleviate financial burdens on industries facing outstanding GST dues.

The council’s decision may have major implications for the RMG sector, which has been grappling with significant GST retrospective tax demand pertaining to a period between July 1 , 2017 — the day GST was rolled out — and March 31, 2023.

Last December, the finance ministry had said that 71 show cause notices were issued to online gaming companies for their alleged GST evasion worth over Rs 1.12 lakh crore.