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Delta Corp shares tank 8% after GST Council retained
28% tax on casinos
Shares of Delta Corp tanked 8% to Rs 181.2 in Thursday's
trade on BSE after the Goods and Services Tax (GST)
Council on Wednesday retained the 28% tax on casinos,
online gaming, and horse racing.
The tax is likely to be
effective from October 1, 2023, and the Council will
meet again to review the taxation after six months from
the date of implementation
The Council, chaired by
Sitharaman and comprising state ministers, in its last
meeting on July 11 approved levying a 28% tax on the
full face value of bets in online gaming, casinos and
horse racing.
"It (28% GST on online
gaming & casinos) is expected to be implemented from 1st
October... It is also decided that this decision will be
reviewed after six months after it is implemented. When
I say six months it does not mean starting from today,
it begins after when it is implemented," said the
finance minister Nirmala Sitharaman.
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The 28% GST announced by the Council will be applicable
on the entry-level and not the winnings, clarified
Sitharaman. She further added the Council will go ahead
with its decision to levy the GST on face value.
"The Council’s decision to levy GST on deposits made at
entry level has brought a sigh of relief for the sector.
It has recommended parity in treatment for casinos and
online games of skill. With the said amendment, the
valuation mechanism for Casino and Online gaming are
kept at par i.e., GST will be charged only on the value
of coins purchased and money deposited in the wallet
respectively, rather than levying GST on each game
played. This is a welcome clarification for the industry
stakeholders," said L. Badri Narayanan, Executive
Partner, Lakshmikumaran & Sridharan Attorneys.
Subsequently, the Law Committee, comprising Centre and
state tax officers, had prepared draft rules for
consideration by the GST Council with regard to the
computation of supply value for tax purposes.
With respect to casinos, the committee had proposed that
the supply value should be the amount paid by a player
for the purchase of tokens, chips, coins or tickets.
At 10.03 am, the scrip was trading 4.8% lower at Rs
187.6 on BSE. On a year-to-date basis, the stock has
declined 13%, while it has plunged over 25% in the last
one month.
In Q1 FY24, Delta Corp reported a net profit of Rs 67.9
crore, an 18.9% YoY rise compared to Rs 57 crore in Q1
FY23. Its revenue increased by 9% to Rs 272.8 crore in
FY23 compared to Rs 250.3 crore in FY22. While the
EBITDA was up 9.5% at Rs 95.8 crore.
Source::: THE ECONOMIC TIMES ,
dated 03/08/2023.
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