Shares of Nazara Technologies and Delta Corp rise as the GST Council plans to review its decision to impose a 28% tax on online gaming. The ministry of electronics and IT will ask for a reevaluation of the tax after the regulatory framework for online gaming rules is developed.
Shares of Nazara Technologies and Delta Corp rise as the GST Council plans to review its decision to impose a 28% tax on online gaming. The ministry of electronics and IT will ask for a reevaluation of the tax after the regulatory framework for online gaming rules is developed.
PremiumShares of Nazara Technologies, and Delta Corp were trading in green on Tuesday's session following the news that the GST Council would be reviewing its decision to impose a 28% tax on online gaming.
On the BSE, Delta Corp shares opened at ₹186.60 apiece and Nazara Technologies shares opened at ₹683.05.
Rajeev Chandrasekhar, a minister of state, said on Monday at an event that the ministry of electronics and IT, the nodal ministry in charge of overseeing online gaming, would ask the GST Council to rethink its decision to impose a 28% tax on the industry after the regulatory framework for online gaming rules develops.
"We are only in the nascent stages of creating a sustainable, permissible online gaming framework. So we will do that and go back to the GST Council and maybe request their consideration on the new regulatory framework," he said.
Rajeev Chandrasekhar says will request GST Council to reconsider 28% tax on online gaming
On July 11, the GST Council announced that the government would levy a 28% goods and services tax on the revenue of gaming companies, horse racing, and casinos.
"We have seen lot of volatility in this sector due to recent news flows on increase in GST. Till the uncertainty continues, these stocks may underperform the broader markets and hence, short term traders should avoid," said Ruchit Jain, Lead Research Analyst at 5paisa.
After the GST Council surprised the sector by imposing a 28% standard GST on online gaming, casinos, and horse racing, Nazara Technologies shares and Delta Corp shares experienced significant losses in early trade on Wednesday (July 12).
Shares of Delta Corp began at its 10% lower level of ₹222.15 while those of Nazara Technologies cracked almost 14% in early trades.
"Online gaming stocks would again be in limelight ahead of GST Council plans to review its decision to impose a 28% tax on online gaming. We believe the uncertainty would continue on gaming companies, horse racing, and casinos businesses. Government may hold their decision to levy a 28% goods and services tax on the revenue.
A conservative investor should avoid these counters while risk seekers can think of buying with a Stop Loss below 173 in Delta. Overall we continue to remain neutral to negative on the sector development," said Prashanth Tapse, Senior Vice President of Research at Mehta Equities.