© Reuters.
Delta Corp, an Indian gaming and hospitality firm currently dealing with an escalating tax demand that exceeds its market capitalisation. This situation has led to its shares tumbling to a 52-week low on Monday. Over the last month, the company’s shares have plunged nearly 30%, lowering its price to Rs 122.6 per piece on the National Stock Exchange (NSE). This downturn was triggered by a Goods and Services Tax (GST) notice served to its subsidiary Deltatech Gaming Limited.
The GST notice, amounting to Rs 6,384 crore ($847 million), was issued to Deltatech Gaming Limited, previously known as Gaussian Networks. This subsidiary operates popular gaming platforms Adda52 and Addagames. The tax notice has propelled Delta Corp’s total tax demand beyond its current market capitalisation of Rs 3,440 crore ($457 million).
Delta Corp also received a direct tax notice for Rs 11,140 crore ($1.48 billion). Additional notices were served to other subsidiaries including Casino Deltin Denzong, Highstreet Cruises, and Delta Pleasure Cruises. These notices demand an extra Rs 5,682 crore ($754 million) based on gross bet value.
The company now faces a significant 28% tax hurdle as GST is imposed on the gross bet value. This could potentially lead to legal repercussions under the Central Goods and Services Tax (CGST) Act of 2017. The escalating tax demands and potential legal challenges have put significant pressure on the company’s stock performance and market valuation.
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