Shares of leading gaming companies, including Delta Corp. and OnMobile Global Ltd., surged in trade on Friday after the Supreme Court granted a stay on the proceedings regarding show cause notices issued by the tax department.
The show cause notices, which are related to the imposition of a 28% Goods and Services Tax on online gaming companies, had been a cause of concern for the industry.
"This development underscores the evolving legal and policy landscape for online gaming in India, with the Supreme Court's eventual ruling likely to shape the future of the industry," said Abhishek A Rastogi, founder of Rastogi Chambers, who is representing the gaming companies before the Supreme Court.
The Supreme Court stayed the proceedings related to all SCNs until the final disposal of the case, which is now scheduled for a hearing on March 18. The tax department had previously informed the Court that some of these notices could become time-barred if a stay was not imposed.
For now, the industry remains cautiously optimistic, awaiting the Supreme Court's final ruling in March.
This comes after online gaming companies on Wednesday sought a stay on show cause notices fearing a coercive action from the tax authorities. The companies contended that this stay will assure them that no demands will be made until the top court gives a final verdict on the issue.
The total tax demand from these e-gaming companies is approximately Rs 1.50 lakh crore.
Gaming Stocks Share Price Today
Shares of Delta Corp led the rally with 6.50% surge to Rs 120.66 per share, as of 1:09 p.m., while OnMobile Global shares were trading with 2.41% gains at Rs 68.82 apiece.
Zensar Technologies scrip advanced 0.55% to trade at Rs 780.20 per share, while shares of Nazara Technologies bucked the scrip to trade 1.30% lower, at Rs 977.95 each.
The benchmark NSE Nifty 50 was trading at a 0.02% decline, as of 1:14 p.m.
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