Shares of Nazara Technologies and Delta Corp were trading higher in Tuesday’s early trade following the news that the Goods and Services Tax (GST) Council would be reviewing its decision to levy a 28 per cent on online gaming.
On the Bombay Stock Exchange (BSE), Delta Corp shares opened at Rs 186.60 per share, and Nazara Technologies began trading at Rs 683.05.
At 11:00 AM, Delta Corp shares were trading 2.59 per cent higher at Rs 187.80 while Nazara shares were 1.49 per cent up at Rs 678.75.
Rajiv Chandrasekhar, a minister of state for electronics and IT, said that the ministry would ask the GST Council to rethink its decision to impose a 28 per cent tax on the industry after the regulatory framework for online gaming rules develops.
"We are only in the nascent stages of creating a sustainable, permissible online gaming framework. So we will do that and go back to the GST Council and maybe request their consideration on the new regulatory framework," he said.
On 11 July, the GST Council announced that the government would impose a 28 per cent tax on the revenue of online gaming companies, horse racing, and casinos.
"The increase in Goods and Services Tax (GST) to 28% is expected to have a significant impact on the gaming industry. This tax hike will likely have several consequences for both game developers and consumers. Firstly, game developers may face higher production costs as they will have to pay more taxes on their equipment, software, and other resources. This could potentially discourage new game development ventures and hinder growth and innovation in the industry," said Girish Sodani, Head of Equity Market at Swastika Investmart Ltd.
Shares of Nazara Technologies, Delta Corp and other gaming companies witnessed significant losses in early trade on Wednesday, 12 July, after the GST council announced a 28 per cent standard GST.
On 12 July, Delta Corp shares opened at a 10 per cent lower level of Rs 222.15, while those of Nazara Technologies plunged almost 14 per cent in early trade.
