At its 50th meeting on July 11, the goods and services tax (GST) council agreed to charge a 28% GST rate on the full value of gaming, horse racing, and casinos. This is bad news for online gaming companies. Representatives of the GST Council said that the council chose to make a change because these are claims that can be taken to court.
After the GST Council meeting, the finance minister, Nirmala Sitharaman, said that the GST law would be changed to include online games, which would be taxed at 28% of its full face value.
At the moment, 18% GST is added to services like casinos, horse racing, and online betting. After the GST law is changed, the date that the GST rate applies to the full value of online games will be rolled out.
Delta Corp is a company that owns and runs casinos and hotels under a number of different names. It is in the business of casino gambling, and most of its overseas casinos are in Panaji, Goa.
Sudhir Mungantiwar, the Forest, Culture, and Fisheries Minister for Maharashtra, said that the council has chosen to get rid of the difference between skill games and games of chance when it comes to online gaming. Experts in the gaming industry were upset when they heard about the GST meeting. They said that it could be “harmful” to the online gaming industry and that charging for the full value is what will hurt the gaming companies so much that it could cause them to go out of business.
”The introduction of a 28% tax rate not only hinders the ability of online gaming platforms to develop new titles and technologies, but also diminishes their competitiveness on the market. Aaditya Shah, COO of IndiaPlays, said, “Their limited financial resources make it hard for them to enter new markets and reach a wider customer base.”
At the same time, the Delta Corp board stated that the final dividend for fiscal 2022-23 would be Re 1.25 per equity share with a face value of Re 1.
At a meeting on April 11, 2023, the company’s board of directors decided to give a final dividend of Rs. 1.25 per equity share with a face value of Rs. 1 for the year that ended on March 31, 2023. Delta Corp said in a regulatory filing to the stock exchanges that the final dividend will be paid to the company’s members after the payment is approved at the company’s annual general meeting on August 4, 2023.
The company had set July 7, 2023 as the date for the last dividend to be paid to shareholders. In a statement to the stock exchanges today, Delta Corp said, “According to the provisions of the Income Tax Act, 1961 (IT Act), as amended by and read with the provisions of the Finance Act, 2020, with effect from 1st April 2020, dividend declared and paid by the company is taxable in the hands of its members and the company is required to deduct tax at source from dividend paid to members at the applicable rates.”
On July 11, Delta Corp shares ended the day up 2.05% at 246.80 each, after reaching a high of 247.95 each during the day on the BSE.