Delta Corp Tanks 14%, Nazara Slips After SC Backs Retrospective GST
Gaming stocks remained under pressure on May 29 after the Supreme Court upheld retrospective Goods and Services Tax (GST) demands on online gaming companies in a major ruling on the applicability of 28% GST on the full face value of bets placed on gaming platforms.
Shares of Delta Corp Ltd fell sharply in trade. As per NSE, Delta Corp shares were trading at Rs 69.50, down 14.25%.
Meanwhile, Nazara Technologies Ltd shares were also in the red. As per NSE, Nazara Technologies stock was trading at Rs 285.10, down 1.52%.
The Supreme Court ruled that online gaming platforms cannot be treated merely as intermediaries and observed that such activities amount to actionable claims under GST law.
The apex court further said that legislative amendments validating the levy of 28% GST were clarificatory in nature and could therefore be applied retrospectively.
The ruling comes as a setback for online gaming companies that had challenged the retrospective tax demand, arguing that the government's interpretation of online gaming as "gambling" under GST law went against several decades of judicial precedents laid down by the Supreme Court and various High Courts.
The dispute traces back to September 2023, when the Supreme Court stayed a Karnataka High Court order that had quashed a Directorate General of GST Intelligence (DGGI) notice seeking nearly Rs 21,000 crore in GST from Gameskraft.
The tax notice alleged that the company promoted online betting through platforms such as Rummy Culture, Gamezy and Rummy Time.
Gameskraft had argued that online gaming operators do not supply actionable claims to players and therefore the GST levy was not sustainable. The company also maintained that gaming platforms only act as intermediaries facilitating contests and do not hold any claim, lien or interest in prize money or participate in side-betting activities.
