Nazara says 28% GST applies only to skill-based real money gaming; revenue share at 5.2%
Nazara Technologies said it remains committed to its growth agenda and will continue to pursue organic and inorganic opportunities across various segments in which it operates.
- Jul 12, 2023,
- Updated Jul 12, 2023 9:46 AM IST
Nazara Technologies Ltd (Nazara Tech) on Wednesday clarified the 28 per cent GST proposed by the GST Council on the online gaming, once implemented, will apply only to the skill-based real money gaming segment of its business.
The contribution of the segment to Nazara's overall consolidated revenues for the financial year FY23 was 5.2 per cent, the gaming company told stock exchanges in a brief note.
"To the extent required, the company will proactively take steps to mitigate any potential impact to this segment of our business, and we anticipate minimal impact to our overall revenues," Nazara Tech said.
Nazara said it remains committed to its growth agenda and will continue to pursue organic and inorganic opportunities across various segments in which it operates.
Kishore Kumar, Lead, Indirect Tax at Taxmann said the domestic gaming industry witnessed a remarkable growth in recent times and was growing at a CAGR of 28-30 per cent. But, he said, it is now saddled with the decision taken in the 50th GST Council Meeting with regard to its taxability.
He said India is probably the only country to levy GST on full face value on all categories of online games. The blanket proposal to levy GST on full face value on online gaming will possibly put an end to the sub judice debate of ‘game of skill’ vs ‘game of chance', he said.
The change will bring game of skill at par with wagering contracts, which are in the nature of gambling and betting.
From a revenue perspective, the proposed amendment may significantly contribute to the Government exchequer and will make states like Goa and Sikkim important from revenue generation perspective, Kumar said adding that the change will require host of amendments under the GST law, especially with respect to the definition and taxability of actionable claims under GST. He said it remains to be seen is whether this change is going to apply prospectively or have a retrospective impact.
"With reference to the GST Council’s decision to levy a 28 per cent goods and services tax (GST) on online gaming, Nazara Technologies Limited 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 financial year FY23 was 5.2 per cent," Nazara told BSE.
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Nazara Technologies Ltd (Nazara Tech) on Wednesday clarified the 28 per cent GST proposed by the GST Council on the online gaming, once implemented, will apply only to the skill-based real money gaming segment of its business.
The contribution of the segment to Nazara's overall consolidated revenues for the financial year FY23 was 5.2 per cent, the gaming company told stock exchanges in a brief note.
"To the extent required, the company will proactively take steps to mitigate any potential impact to this segment of our business, and we anticipate minimal impact to our overall revenues," Nazara Tech said.
Nazara said it remains committed to its growth agenda and will continue to pursue organic and inorganic opportunities across various segments in which it operates.
Kishore Kumar, Lead, Indirect Tax at Taxmann said the domestic gaming industry witnessed a remarkable growth in recent times and was growing at a CAGR of 28-30 per cent. But, he said, it is now saddled with the decision taken in the 50th GST Council Meeting with regard to its taxability.
He said India is probably the only country to levy GST on full face value on all categories of online games. The blanket proposal to levy GST on full face value on online gaming will possibly put an end to the sub judice debate of ‘game of skill’ vs ‘game of chance', he said.
The change will bring game of skill at par with wagering contracts, which are in the nature of gambling and betting.
From a revenue perspective, the proposed amendment may significantly contribute to the Government exchequer and will make states like Goa and Sikkim important from revenue generation perspective, Kumar said adding that the change will require host of amendments under the GST law, especially with respect to the definition and taxability of actionable claims under GST. He said it remains to be seen is whether this change is going to apply prospectively or have a retrospective impact.
"With reference to the GST Council’s decision to levy a 28 per cent goods and services tax (GST) on online gaming, Nazara Technologies Limited 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 financial year FY23 was 5.2 per cent," Nazara told BSE.
Also read: TCS Q1 results, dividend today: Deal wins, salary hike impact & other things to watch
Also read: HDFC shares: Last day of trading, F&O settlement, passive flows, merger details & more