Delta Corp shares closed lower as 28% GST on online gaming came into effect from October 1

Shares of Delta Corp Ltd ended 4% lower today after 28% GST on online gaming came into effect from October 1. The equity market was closed on October 1 and October 2. Delta Corp stock closed 4% lower at Rs 136.90 against the previous close of Rs 142.70 on BSE. Market cap of Delta Corp fell to Rs 3665.79 crore on BSE.  The stock fell 4.27% intraday to Rs 136.60 on BSE. Total 11.39 lakh shares of the firm changed hands amounting to a turnover of Rs 16.02 crore in the previous session.    

The gaming and casino stock has lost 32 per cent in one year and fallen 36.43 per cent since the beginning of this year. Delta Corp stock has a one-year beta of 1.4, indicating very high volatility during the period.     

In terms of technicals, the relative strength index (RSI) of Delta Corp stands at 18, signaling it's trading neither in the oversold nor in the overbought zone. Delta Corp shares are trading lower than the 5 day, 10 day, 20 day, 50 day, 100 day and 200 day moving averages.        

Earlier, online gaming platforms paid 18 percent GST on the platform fees.  The charge was also known as Gross Gaming Revenue (GGR) and not on the full value of the transaction, also known as Contest Entry Amount (CEA).This is the fees charged by online gaming portals. 

The stock slipped 28% intraday on July 12 after the GST Council imposed a levy of 28 per cent GST on online gaming, horse racing, and casinos. Later, the Delta Corp stock closed 23% lower at Rs 189.35 after the GST Council announced a levy of 28 per cent GST on online gaming, horse racing, and casinos.  Earlier, online gaming platforms paid 18 percent GST on the platform fees.  

The stock declined 19% in the last week after the company received tax notices totaling Rs 16,822 crore from the Directorate General of GST Intelligence. The demand was for the period between July 2017 and March 2022.    

One notice for Rs 11,140 crore was issued against Delta Corp. The other notice for Rs 5,682 crore was raised against three of its subsidiaries -- Casino Deltin Denzong, Highstreet Cruises and Delta Pleasure Cruises, the company said in a regulatory filing.     

In response to the GST demand, Delta Corp said the GST notice was based on the gross bet value and not gross gaming value. It said it would pursue legal remedies to challenge this order. The company pointed out that such tax demands were not a company-specific problem, but an industry-wide phenomenon.       

Delta Corp is engaged in the operation of casino. Its segments include real estate, gaming, hospitality and others. The company operates its gaming and hospitality businesses under the DELTIN brand. The company owns three casinos in Goa, including Deltin Royale, Deltin JAQK and Deltin Caravela.    

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