Nazara Tech shares tumble over 8% intraday post Rs 1,120 crore GST notice
Nazara Technologies on Thursday fell up to 8% to Rs 845.65 on BSE after two of its subsidiaries got show cause notices in relation to Goods and Services Tax (GST) with a total liability of Rs 1,120 crore.
The show cause notices were sent by the Director General of GST Intelligence, Kolkata to Openplay Technologies and Halaplay Technologies on Tuesday, July 16 for proposed liability of Rs 845.72 crore and Rs 274.21 crore, respectively, Nazara disclosed in a regulatory filing.
These claims are in relation to the calculation of GST based on the sums pooled by players as opposed to gross gaming revenues, the company filing said in response to the show cause notices sent to its subsidiaries. «Both subsidiaries are reviewing the notices with their legal counsels and tax advisors to determine their future course of action,» it said further.
«For the quarter ended March, 2024 (Jan-March 2024), these subsidiaries collectively contributed to less than 2% of our revenues and less than 1% of our profit,» Nazara said.
The stock fell sharply as the tax liability is about 16x of Nazara's FY24 PAT. As of FY24, Nazara had a cash balance of Rs 1,450 crore.
«The claim has risen due to retrospective taxation of levying GST on amount pooled by players as opposed to gross gaming revenue (difference between money wagered and amount that is distributed as prize money – basically it is platform fee/revenue of gaming companies). While the current GST rate is 28% on full pot value (amount wagered) given the demand is retrospective in
