The Goods and Services Tax (GST) hike on casinos from 18% to 28% by the GST Council has sent ripples through the gaming and hospitality sector, particularly affecting Delta Corp Ltd., a prominent player in this industry.
The Announcement of the GST Hike
The unexpected announcement of the GST hike during the 50th GST conference came as a shock to many in the industry. This decision by the GST Council had an immediate and significant impact on the gaming industry, with Delta Corp Ltd. being one of the most affected companies.
The Immediate Impact on Delta Corp Ltd.
Delta Corp Ltd. experienced a sharp decline in its share prices right after the announcement, with a staggering 23% drop. The GST hike hit the company hard, affecting its market value and investor confidence.
The Change in GST Calculations
Before the GST hike, Delta Corp Ltd. paid 28% GST on its gross gaming revenue (GGR), effectively costing the company 21.875% on its GGR. However, post-hike, the company is required to pay 28% GST on the sale of chips. This change in the GST calculation has increased costs for Delta Corp Ltd.
The Long-Term Impact on Delta Corp Ltd.
While the immediate impact of the GST hike has been felt, the long-term consequences are yet to be fully realized. Analysts predict that the hike will reduce Delta Corp’s earnings per share (EPS) by 10-12% for FY24. Additionally, the increased GST may make online gaming and casinos more expensive for customers, potentially reducing demand for these services.
Delta Corp Ltd.’s Response to the GST Hike
In response to the GST hike, Delta Corp Ltd. has been exploring various strategies to mitigate the impact. The company has been offering promotional chips to customers to offset the increased GST costs, ensuring that customers receive full value.
Conclusion
The GST hike has posed significant challenges for Delta Corp Ltd., impacting its financial performance and market position. However, the company remains resilient and is actively addressing the challenges posed by the GST hike. As the gaming and hospitality sector navigates through these changes, Delta Corp Ltd. will continue to adapt and innovate to maintain its position in the industry.
FAQs:
Q: How has the GST hike affected Delta Corp Ltd.?
A: The GST hike has led to a decline in Delta Corp’s share prices and increased costs for the company due to higher GST rates on casino services.
Q: What is Delta Corp Ltd.’s response to the GST hike?
A: Delta Corp Ltd. is offering promotional chips to customers to offset the increased GST costs and ensure customer satisfaction.
Q: What is the long-term impact of the GST hike on Delta Corp Ltd.?
A: Analysts predict that the GST hike will reduce Delta Corp’s earnings per share (EPS) and may also reduce demand for its services due to increased costs for customers.
