Nazara Technologies expects GST hike to only impact skill-based real money biz
The company also said it would take steps proactively to mitigate any potential impact on the segment and anticipates minimal impact on overall revenues.
Gaming firm on Wednesday said that the revised GST tax slabs are likely to affect its skill-based real money segment
"With reference to the GST Council's decision to levy a 28% goods and services tax (GST) on online gaming, Nazara Technologies would like to clarify that this tax, once implemented, will apply only to the skill-based real money gaming segment of our business. The contribution of this segment to our overall consolidated revenues for the FY23 was 5.2%," it informed the exchanges in a regulatory filing.
The company also said it will take steps proactively to mitigate the potential impact on the segment and anticipates minimal impact on overall revenues.
The online gaming industry—especially companies featuring real money games such as poker, rummy, and fantasy sports—has been reeling under the decision made by the GST Council on Tuesday to revise the tax slab from 18% on gross revenue to 28% on face value. Players and onlookers in the space warn that the transition to a higher tax slab in online gaming is likely to result in gamers migrating to platforms outside India in a bid to avoid paying taxes altogether.
"It is likely to create a lot of financial constraints for startups... It also hinders our ability to expand our reach to new markets and reach a wider audience," Aaditya Shah, COO of online gaming firm IndiaPlays, told YourStory.
Meanwhile, Nazara Technologies' board this week also approved the company's intention to raise Rs 750 crore, making it the company's first fundraising activity since its IPO in 2021.
Edited by Kanishk Singh