Delta Corp jumps as GST Council defers proposal to levy 28% tax on casinos, online gaming, race courses and lotteries

Shares of Delta Corp surged on Wednesday after a proposal to impose a 28 percent goods and services tax (GST) on casinos, online gaming, race courses and lotteries was deferred.

Previously known as Arrow Webtex, Delta Corp is an Indian gaming and hospitality corporation that operates casinos and hotels under several brands. The firm's stock jumped as much as 7.5 percent after the news broke before settling at Rs 181.65 apiece for the day on BSE, up 2.2 percent from its previous close. The Delta Corp stock has corrected almost 30 percent so far this year.

Karnataka Chief Minister Basavaraj Bommai told reporters that the GST Council had deferred the proposal to levy 28 percent GST on casinos, online gaming, race courses and lottery.

A Group of Ministers (GoM), headed by Meghalaya Chief Minister Conrad Sangma, has been given a fortnight to iron out the issue of the valuation mechanism, an issue raised by Goa, and submit its report.

The panel proposed that online gaming should be taxed at the full value of the consideration, including the contest entry fee paid by the player on participating in the game. For race courses, the GoM recommended that GST be levied on the full value of bets pooled in the totalizators and placed with the bookmakers.

It also proposed making no distinction on the grounds of the game of skill or game of chance for the purpose of the levy of GST, suggesting a flat 28 percent rate on all such activities.

The two-day meeting of the GST Council in Chandigarh, chaired by Union Finance Minister Nirmala Sitharaman, ended on Wednesday without any decision on the contentious issue of the extension of the July 1 deadline of the GST compensation mechanism.

The Opposition-ruled states have been asking for an extension of five years with now BJP-ruled states also joining in the demand. The states have also cited a recent Supreme Court ruling that decisions made by the Council are not binding and states need not stick to them. The ruling by the court has been seen by some as states having powers to determine taxation.