Shares of Delta Corp climbed by as much as 7 per cent on January 10 after the Supreme Court put a hold on GST show cause notices amounting to ₹1.12 lakh crore issued to online gaming companies.
Shares of Delta Corp climbed by as much as 7 per cent on January 10 after the Supreme Court put a hold on GST show cause notices amounting to ₹1.12 lakh crore issued to online gaming companies.
The Supreme Court has halted all further proceedings related to show cause notices until the case is resolved. The final hearing is scheduled for March 17.
As of 12:10 PM on January 10, Delta Corp shares on the NSE were trading over 4 per cent higher at ₹118.16 each.
The Supreme Court has ordered a halt to all further proceedings related to the show cause notice until the case is conclusively resolved. Online gaming companies received 71 show-cause notices for allegedly evading Goods and Services Tax (GST) amounting to ₹1.12 lakh crore during 2022-23 and the first seven months of 2023-24.
The gaming industry had requested a stay on the GST show cause notices, raising concerns about potential coercive actions by tax authorities in connection with these notices.
The DGGI issued tax demands totaling ₹1.12 lakh crore against 71 online gaming companies, which could escalate to ₹2.3 lakh crore when including penalties.
In August 2023, an amendment to the CGST Act introduced a 28 per cent tax on the "full face value" of the entry amount, applied retroactively from 2017. This led to the issuance of show cause notices to the industry, prompting gaming companies to challenge these orders.
Earlier, in May 2023, the Karnataka High Court annulled notices worth ₹21,000 crore issued to Gameskraft. However, the Supreme Court stayed this order in September 2023.
"The Supreme Court ruling is a big relief to online gaming companies. The Government of India (GoI) and companies like Delta Corp, Nazara Technologies, etc. think that 28% GST is applicable from 1 October 2023, while the GoI believes that the revision in GST from 18% to 28% from 1 October 2023 was just for clarity. This led to massive GST notices for online gaming companies, totalling around ₹1.13 lakh crore in FY23 and the first seven months of FY24," said Mahesh M Ojha, AVP — Research at Hensex Securities.