Delta Corp, Nazara Tech Shares Tank Up To 28% As GST Council Imposes 28% Tax

28% GST on online gaming: c in early trade on Wednesday. Shares of Delta Corp opened at their 10 per cent lower circuit of Rs 222.15 and later crashed up to 28 per cent to Rs 178.20, near its 52-week low, after the GST Council gave the nod to levy 28 per centGST on online gaming, horse racing, and casinos at full value.

Meanwhile, those of Nazara Technologies cracked over 14 per cent in early deals.

In a major setback to the country’s online gaming industry, the GST Council on Tuesday decided to levy a 28 per cent tax on the full value of monies paid by users. Moreover, GST on online gaming will be imposed without any differentiation of whether it’s based on skill or chance.

On the increase, Nazara Technologies said that the GST Council’s decision to levy a 28 per cent goods and services tax (GST) on online gaming will apply only to the skill-based real money gaming segment of its business, which contributed 5.2 per cent to the company’s overall consolidated revenue during FY23.

“The company will proactively take steps to mitigate any potential impact to this segment of our business, and we anticipate minimal impact to our overall revenues,” it said in an exchange filing. “The company remains committed to its growth agenda and will continue to pursue organic and inorganic opportunities across various segments in which it operates,” it said.

GST Council Meet Outcome

“I am happy to say we have arrived at a decision. There will be some amendments to GST law. Simply put, online gaming, horse racing, and casinos will be taxed at 28 per cent and will be taxed on full face value,” finance minister Nirmala Sitharaman said.

The finance ministry explained that the amendments to GST law will be brought to specify that tax will be applicable on the face value of the chips purchased in the case of casinos, on the full value of the bets placed with bookmaker/totalisator in the case of horse racing and on the full value of the bets placed in case of the online gaming.

Additionally, the GST on online gaming will be applied uniformly, without any distinction between games that require skill or those that depend on chance.

Industry players expressed their concerns. Malay Kumar Shukla, secretary of the E-Gaming Federation, called the move “an extremely unfortunate decision as charging a 28 per cent tax on full face value will lead to a nearly 1,000 per cent increase in taxation and prove catastrophic for the industry”.