Nazara Tech gets GST demand notice of Rs 5.68 crore; says 'We will file an appeal against the order'

Mumbai-based gaming company Nazara Technologies has received a GST demand notice of about Rs 5.68 crore, including tax, penalty and interest, due to the non-receipt of export proceeds within the stipulated time period.

The order, dated Jan. 31, was issued by the Additional Commissioner of CGST and Central Excise in Mumbai and served on the company on Feb. 4. Nazara said it will appeal the decision within the prescribed deadlines.

Alleged delay in export proceeds

Nazara said that the tax authorities imposed a liability of Rs 2.84 crore in GST dues and an equal amount in penalties, plus accrued interest. 

The charge is based on non-receipt of export proceeds within the time limit set by regulations. Although Nazara faces a combined demand of approximately Rs 5.68 crore, it does not expect the notice to have a serious impact on its day-to-day operations or overall financial performance.

Previous notices to subsidiaries

Last year, two Nazara subsidiaries, Openplay Technologies and Halaplay Technologies, received notices for GST liabilities totalling around Rs 1,120 crore.

Those notices were issued by the Director General of GST Intelligence in Kolkata for the periods between 2017-18 and 2022-23. While these were far larger sums, the subsidiaries obtained interim relief from the Calcutta High Court.

Nazara maintains that these subsidiaries contributed less than 2% of the company’s revenue and about 1% of its profit in the quarter ended March 2024, so any potential financial burden would be limited.