Delta Corp shares jumped nearly 5% on January 8 as Supreme Court agreed to hear online gaming industry’s pleas against GST show cause notices on January 10.
At 12 pm, Delta Corp shares were trading 6% higher at Rs 116.43 apiece.
The industry is seeking stay on show cause notices with concerns over potential coercive action by tax authorities, reported CNBC-TV18.
The industry has expressed concerns, saying the issue has been pending for several years, added CNBC-TV 18.
Online gaming companies have been sent 71 show-cause notices involving the evasion of Goods and Services Tax (GST) worth Rs 1.12 lakh crore in 2022-23 and the first seven months of 2023-24.
Online gaming firms have been grappling over the payment of 28 percent GST instead of 18 percent for the period up to October 1, 2023. While the companies argue that 28 percent tax is applicable only starting October 1, the government is of the opinion that the October 1 revision only provided clarity to a law that was already in force. The government’s stance is that the demand for tax dues is not retrospective in nature.
The GST Council, in August 2023, amended the law to clarify that all online games involving bets, irrespective of skill or chance, would attract a GST rate of 28 percent on the full value of the bets placed, and not on the gross gaming revenue, from October 1.
Following the decision, online gaming companies have been served with huge tax demands that experts say will likely kill the entire industry.
