WinZo flags GST concerns as growth rate takes a hit
The goods and services tax (GST) levied on online gaming platforms should be on their revenues, and not on deposits made by customers in platform wallets, WinZo co-founder and chief executive Paavan Nanda told FE, as the company’s growth rate slowed in FY24.
The company’s growth is likely to be stymied further in FY25, when the full impact of the higher GST rate of 28% will be felt. The new GST regime came into force in October 2023, resulting in a partial impact on the gaming platform’s FY24 financials. WinZo reported a net revenue of Rs 1,055 crore in FY24, up 70% year-on-year from Rs 619 crore.
The company’s adjusted profit after tax at the end of FY24 stood at Rs 315 crore, up 151% from around Rs 125 crore in the previous fiscal. Its earnings before interest, taxation, depreciation and amortisation (Ebitda) came in at Rs 397.2 crore. WinZO grew at around 200% in FY23 over FY22, but its growth rate slowed significantly since the GST rate hike.
“We have no issues with the GST rate (of 28%). That depends on the decision of the government. However, currently GST is charged on deposits to the gaming wallets. That is not our revenue. Our revenue is a percentage of the winnings they earn on the platform,” Nanda said.
