Delta Corp shares tumble 20% on Rs 16,800-crore GST demand notices

Shares of Delta Corp Ltd crashed 20% in early deals today after the gaming and casino firm said it has received tax notices totaling Rs 16,822 crore from the Directorate General of GST Intelligence. The demand is for the period between July 2017 and March 2022. The company informed the same to the bourses on Friday. Delta Corp shares tanked 20% to Rs 140.20 on Monday against the previous close of Rs 175.25 on BSE. Market cap of Delta Corp fell to Rs 3850 crore in the current session.

Investors have lost Rs 842.69 crore today from Friday’s market cap of Rs 4692.69 crore on BSE. Total 1.41 lakh shares of the firm changed hands amounting to a turnover of Rs 2.23 crore today.

This is the second major crash for the stock in a period of nearly three months. In July 12 this year, the stock closed 23% lower at Rs 189.35 after the GST Council imposed a levy of 28 per cent GST on online gaming, horse racing, and casinos.

The gaming and casino stock has lost 30.91 per cent in one year and fallen 32.74 per cent since the beginning of this year. Delta Corp stock has a one-year beta of 1.4, indicating very high volatility during the period.

In terms of technicals, the relative strength index (RSI) of Delta Corp stands at 34.3, signaling it's trading neither in the oversold nor in the overbought zone. Delta Corp shares are trading lower than the 5 day, 10 day, 20 day, 50 day, 100 day and 200 day moving averages.

One notice for Rs 11,140 crore was issued against Delta Corp. The other notice for Rs 5,682 crore has been raised against three of its subsidiaries -- Casino Deltin Denzong, Highstreet Cruises and Delta Pleasure Cruises, the company said in a regulatory filing.

Delta Corp said the GST notice was based on the gross bet value and not gross gaming value. It said it would pursue legal remedies to challenge this order. The company pointed out that such tax demands were not a company-specific problem, but an industry-wide phenomenon.

"Demand of GST on gross bet value, rather than gross gaming revenue, has been an industry issue and various representations have already been made to the Government at an industry level in relation to this issue," the filing said.

"The Company and its subsidiaries have been legally advised that all the above notices and the tax demands are arbitrary and contrary to law, and the Company and its subsidiaries will pursue all legal remedies available to them to challenge such tax demands and related proceedings," the company said.

Delta Corp is engaged in the operation of casino. Its segments include real estate, gaming, hospitality and others. The company operates its gaming and hospitality businesses under the DELTIN brand. The company owns three casinos in Goa, including Deltin Royale, Deltin JAQK and Deltin Caravela.

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