Nazara Technologies to challenge Rs 2.84 Cr GST demand over export payment delays
Mumbai-based Nazara received an order dated January 31 from the Additional Commissioner of CGST & Central Excise with a tax liability of Rs 2.84 crore under GST laws.
Nazara Technologies on Wednesday said that it has been ordered to pay approximately Rs 5.68 crore in back taxes, penalties, and interest by tax authorities, citing delays in receiving export proceeds.
In a regulatory filing, the Mumbai-based company revealed that it received an order dated January 31 from the Additional Commissioner of CGST & Central Excise with a tax liability of Rs 2.84 crore under goods and services tax (GST) laws.
An equal penalty was levied, alongside accrued interest, for allegedly failing to receive export payments within stipulated timelines.
Nazara, known for popular mobile games like World Cricket Championship and esports platforms, said it will appeal the demand, asserting the move will not materially impact its operations.
Last year, two of Nazara's subsidiaries, Openplay Technologies and Halaplay Technologies, issued a show cause notice and an intimation regarding GST liabilities totaling approximately Rs 1,120 crore.
Director General of GST Intelligence in Kolkata proposed liability of Rs 845.72 crore and Rs 274.21 crore on both the companies. The claims pertained to the financial years spanning from 2017-18 to 2022-23.
Later, however, The Calcutta High Court granted interim relief to Openplay Technologies, a subsidiary of Nazara Technologies, providing temporary reprieve from the show cause notices.
The subsidiaries are disputing the GST calculation method, arguing that it should be based on gross gaming revenue rather than the player pool contribution.
Nazara further highlighted that these subsidiaries contribute minimally, accounting for less than 2% of its revenue and 1% of its profit in the quarter ending March 2024.
In 2023, the GST Council implemented a higher 28% tax rate on the total contest entry amounts for online gaming, casinos, and horse racing. In the previous year, 71 show cause notices were issued to online gaming companies for alleged GST evasion exceeding Rs 1.12 lakh crore during the financial years 2022-23 and 2023-24.
Edited by Megha Reddy