Delta Corp Share: The Impact of Goods and Services Tax Council‘s Decision on Goa-based Casino Operator Delta Corp and Nazara Technologies. Back GST on Online Gaming: Delta Corp Share price tanks 20%, Nazara Tech share price drops 5% on 28% tax levy.
Delta Corp, HDFC Bank shares see high turnover, Suzlon Energy high volume. Delta Corp Shares crash 28% as government imposes 28% GST on casinos.
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Introduction: Delta Corp Share
The recent decision by the GST Council to impose a 28% Goods and Services Tax (GST) on online gaming has sent shockwaves through the Indian gaming industry.
This move has had a significant impact on Goa-based casino operator Delta Corp and digital gaming firm Nazara Technologies.
In this article, we will explore the repercussions of the GST Council’s decision on these two companies and its implications for the wider online gaming industry.
The Decline of Delta Corp Shares
Shares of Delta Corp, a prominent casino operator based in Goa, plummeted by 28% to Rs 178.20 following the announcement by the GST Council. This drop brought the stock price close to its 52-week low.
The imposition of a 28% GST on online gaming, horse racing, and casinos at full value has raised concerns about the financial viability of Delta Corp’s operations.
The company is now faced with the challenge of sustaining profitability in the face of increased taxation.
Impact on Nazara Technologies
Shares of Nazara Technologies, a leading digital gaming and e-sports firm, also witnessed a significant decline of over 14% in morning trade.
However, the company managed to recover most of its losses after clarifying that the skill-based real money gaming segment only contributed 5.2% to its FY23 revenues.
While this clarification provided some relief to investors, the overall impact of the GST Council’s decision on Nazara Technologies remains a cause for concern.
GST Council’s Decision and Its Implications
The Goods and Services Tax Council’s decision to impose a 28% tax on the full value of monies paid by users has dealt a major setback to the country’s online gaming industry.
The lack of differentiation between skill-based and chance-based games means that all forms of online gaming will be subject to the same tax rate.
This move has raised questions about the fairness of the decision and its potential impact on the growth and sustainability of the industry.
Nazara Technologies’ Response
In response to the Goods and Services Tax Council’s decision, Nazara Technologies clarified that the 28% GST will only apply to the skill-based real money gaming segment of its business.
This segment represents a small portion of the company’s overall revenues, which provides some relief for Nazara Technologies. However, the broader implications of the decision on the online gaming industry as a whole cannot be ignored.
Challenges for the Online Gaming Industry
The imposition of a 28% GST on online gaming poses significant challenges for the industry. The higher tax rate may discourage users from engaging in online gaming activities, leading to a decline in revenues for gaming companies.
Additionally, the lack of differentiation between skill-based and chance-based games fails to recognize the strategic and competitive nature of certain gaming formats. This may stifle innovation and hinder the growth potential of the industry.
Future Outlook for Delta Corp and Nazara Technologies
Both Delta Corp and Nazara Technologies face an uncertain future in the wake of the GST Council’s decision.
Delta Corp will need to reassess its business model and explore strategies to mitigate the impact of increased taxation on its profitability.
Nazara Technologies, on the other hand, will need to focus on diversifying its revenue streams and reducing reliance on the skill-based real money gaming segment.
Conclusion: Delta Corp Share
The GST Council’s decision to impose a 28% GST on online gaming, including casinos, has had a significant impact on the stock prices of Delta Corp and Nazara Technologies.
While Delta Corp witnessed a sharp decline in share prices, Nazara Technologies managed to recover most of its losses by clarifying the limited contribution of its skill-based real money gaming segment.
However, the broader implications of the decision on the online gaming industry raise concerns about the future growth and sustainability of the sector.
FAQs (Frequently Asked Questions)
Q. Is Delta Corp the only casino operator affected by the GST Council’s decision?
No, the GST Council’s decision impacts all casino operators and online gaming companies operating in India.
Q. Will the 28% GST discourage users from participating in online gaming activities?
The higher tax rate may have a deterrent effect on some users, potentially leading to a decline in revenues for gaming companies.
Q. Can Nazara Technologies offset the impact of the GST by diversifying its revenue streams?
Nazara Technologies can mitigate the impact by diversifying its revenue sources and reducing dependence on the skill-based real money gaming segment.
Q. What steps can Delta Corp take to cope with the increased taxation?
Delta Corp may need to reassess its business model, explore cost-saving measures, and identify new revenue streams to maintain profitability.
Q. Is there a possibility of the GST Council revisiting its decision in the future?
It is difficult to predict future policy changes, but stakeholders in the gaming industry may advocate for a reconsideration of the tax rates imposed by the GST Council.