Shares of Delta Corp and Nazara Tech have surged following reports indicating that the GST Council might amend the CGST Act to nullify retrospective tax demands, a move sought by the gaming industry for a more favorable taxation framework.
As of 11 am, Delta Corp’s shares were up over 12 percent, while Nazara Tech also experienced a significant increase in early trading. Over the past month, Delta Corp’s stock has risen by 23 percent, and Nazara’s by 40 percent.
The CGST Act includes provisions for notices regarding lower taxes paid by e-gaming entities due to ambiguity or interpretation issues. The GST Council is expected to discuss a recommendation to amend the Act in its upcoming meeting on June 22, according to The Economic Times.
In April, Prime Minister Modi had emphasized the need for a balanced approach rather than over-regulation in the gaming industry to address challenges.
Currently, the Supreme Court is considering a batch of 30 petitions filed by online real money gaming companies challenging retrospective GST notices seeking substantial dues calculated at 28 percent on the face value of bets.
Industry representatives, preferring anonymity, have stated plans to engage with the new government after the general elections to advocate for a reduction in the Goods and Services Tax (GST). They propose taxing based on Gross Gaming Revenue (GGR) rather than the full face value, arguing that the current high tax rate is unsustainable for startups in the sector.
Since October 2023, online gaming has been subject to GST based on the full face value rather than GGR, resulting in a significant increase in monthly revenue from Rs 200 crore to Rs 1100 crore.
