Delta Corp sinks to 52-week low over GST woes, stock down 22% in a month

Delta Corp Limited shares plunged 8.6 percent to hit a 52-week low of Rs 128 in the early trade on October 16, extending losses for the third session in a row after a subsidiary received a notice for payment of Rs 6,384 crore for shortfall in taxes.

The latest notice takes the total demand from the group to well above Rs 23,000 crore, significantly higher than the company’s market capitalisation of Rs 3,749 crore.

In the last month, the casino company stock has nosedived nearly 22 percent. Deltatech Gaming, formerly Gaussian Networks, runs gaming apps like Adda52 and Addagames.

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“The GST notice advises Deltatech Gaming Limited to pay the alleged tax shortfall along with interest and penalty failing which a show cause notice will be issued to the Company under Section 74(1) of the CGST Act, 2017,” the company said in the exchange filing.

On September 22, the company received a direct tax notice of Rs 11,140 crore. Three of its subsidiaries, Casino Deltin Denzong, Highstreet Cruises, and Delta Pleasure Cruises, too, were issued a notice for Rs 5,682 crore.

The amounts claimed were based on the gross bet value of games played, the company said.

“Demand of GST on gross bet value, rather than gross rake amount, has been an industry issue and various representations have already been made to the government at an industry level in relation to this issue,” it has said.

Casinos and online gaming companies are facing challenges due to the GST council’s decision to levy a 28 percent tax on the entire face value of chips purchased for playing. This means that for every Rs 100 worth of chips bought, the player effectively receives only Rs 72 to wager. Previously, GST was applied solely to the net house winnings.

At 9.33 am, the stock was trading at Rs 129.20, down 7.71 percent lower than the previous day.

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