Indian gaming company Nazara Technologies is facing a GST bill of Rs 1,120 crore. Its subsidiaries OpenPlay Technologies and HalaPlay Technologies have received notices from the GST department.

OpenPlay, which was acquired by Nazara in August 2021, has a liability of Rs 845.72 crore, while HalaPlay, which was acquired through multiple tranches, has a liability of Rs 274.21 crore for the period 2017-18 to 2022-23.

Both subsidiaries are challenging the GST calculation method, arguing that it should be based on overall gaming revenue and not the contribution of the player pool.

Nazara emphasizes that for the quarter ending March 2024, these subsidiaries are small contributors, generating less than 2% of their revenues and less than 1% of their profits.

In a move to develop a skill-based gaming portfolio, Nazara Technologies acquired Hyderabad-based OpenPlay Technologies for Rs 186.4 crore in August 2021. OpenPlay operates "Classic Games," a popular consumer gaming platform, featuring a variety of skill-based games. This acquisition marked Nazara's second foray into the real-money skill gaming space, following its purchase of Halaplay in 2019.

In 2023, the GST Council has decided to levy a higher GST rate of 28% on the entire competitive entry amounts for online games, casinos and gambling.

Last year, 71 show-cause notices were issued to online gaming companies for alleged GST evasion of Rs 1.12 lakh crore in FY 2022-23 and FY 2023-24.