Nazara Technologies on Wednesday revealed that two of the firm’s subsidiaries have received show cause notice and a demand for GST liability worth nearly Rs 1,120 crore. The firm said that its units, Openplay Technologies and Halaplay Technologies, were issued demand orders for GST liability worth Rs 845.72 crore and Rs 274.21 crore respectively.
Both the subsidiaries received the notices from the Director General of GST Intelligence, Kolkata, reported PTI. Both the claims from the units were for the period 2017-18 to 2022-23.
The parent entity issued an official filing and informed that the subsidiary entities are reviewing the notices and will decide the future course of action after consultation with the tax and legal advisors.
“We wish to inform you of the following developments related to ongoing GST matters of the gaming industry on behalf of our subsidiaries...Openplay Technologies...received a show cause notice on 16th July 2024 under Section 74(1) of the CGST Act, 2017, and the State SGST Act, 2017, from the Director General of GST Intelligence, Kolkata for a proposed liability of Rs 845.72 crore for the period from 2017-18 to 2022-23,” the exchange filing said.
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These claims for the companies are regarding the calculation of the Goods and Services Tax (GST) on the basis of the sums collected by the players as opposed to the gross gaming revenues, Nazara Tech revealed.
The company informed that these units together accounted for less than 2 per cent of the overall revenue of the parent entity during the January-March 2024 quarter. Further, the units accounted for less than 1 per cent of the overall profit in the quarter under review.
Earlier in August last year, the GST Council said that online gaming platforms would be liable to pay a 28 per cent tax imposed on the full value of the bets placed on these platforms.