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GST Uncertainty Forces Delta Corp To Keep IPO Plans On Hold 

Delta Corp Ltd, one of the biggest names in the gaming and hospitality industry, is said to have decided to halt the plans of taking their online gaming division public. This decision to halt the IPO process is said to have been caused due to the uncertainties concerning the GST levy method by the Indian government.

Delta Corp offers real money and wagering games, which could see a change in tax reforms as the Goods and Service Tax (GST) Council recently announced how the company’s now be taxed at 28% on full face value going forward. Citing this potential change, Delta Corp is said to wait and get better clarity on the situation before going ahead with their IPO.

Delta Corp awaits clarity on GST   

Delta Corp CFO Hardik Dhebar was quoted by Moneycontrol saying, “The investing community obviously would want absolute crystal clarity when it comes to online gaming, and they would want a clear picture as to what the way forward is and without which, nobody is going to put $1 into any new investment, especially in a sector which has this kind of overhang.”

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Things are looking good for Delta Corp Ltd as the company recorded a 9% rise in consolidated revenue in the Q1 results for FY24 with the consolidated EBITDA also going up by 9.5% along with net profit rising by 18.9 percent. The online gaming division is reported to have contributed 15% to the net revenue. 

However, the new suggested tax reform could dampen the growth of companies in the real money gaming industry. While the GST Council clarified how the tax will be levied on full face value the decision on how it will be taxed on initial deposit or every contest, remains unclear. The GST council is expected to answer all the queries and during the upcoming meeting on 2nd August 2023.

Many online gaming firms as well as industry officials have stated how the 28% GST on full face value could lead to heavy losses of revenue. This could also see many startups being forced to shut down, citing the added burden of increased tax.

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