Paytm Arm First Games' GST Demand Cut to ₹703.66 Crore From ₹5,712 Crore
The Paytm GST demand against subsidiary First Games Technology Pvt Ltd has been reduced to ₹703.66 crore from a proposed ₹5,712 crore, One 97 Communications Ltd said on Tuesday, October 13. The company said the order has no incremental financial impact on it.
Details of the Demand Order
The order was issued by the Additional Commissioner of Central Goods and Services Tax (CGST), Noida, Uttar Pradesh. It relates to the period from April 2018 to March 2023 and carries an additional penalty equivalent to the tax liability, along with applicable interest. First Games received the order on October 12, 2026.
The original show-cause notice, issued on April 28, 2025, had proposed a GST liability of ₹5,712 crore, with interest and penalties payable separately. The order was passed under Section 74(9) of the Central Goods and Services Tax Act, 2017, and the corresponding provisions of the Uttar Pradesh Goods and Services Tax Act, 2017, read with Section 20 of the Integrated Goods and Services Tax Act, 2017.
| Item | Previous (Show-Cause Notice) | Current (Order) | Change |
|---|---|---|---|
| Proposed GST liability | ₹5,712 crore | ₹703.66 crore | About 87.7% lower |
| Period covered | April 2018 to March 2023 | April 2018 to March 2023 | Unchanged |
| Penalty | Payable separately | Equal to tax liability, plus interest | Applied in the order |
Why Paytm Reports No Financial Impact
One 97 Communications said First Games is treated as a joint venture for group consolidation under applicable accounting standards. Its revenue is therefore not consolidated in Paytm's financial statements. Its share of profit or loss under the equity method was nil in Paytm's consolidated profit and loss account for the year ended March 31, 2026.
The company also said the carrying value of its investment in First Games in the consolidated financial statements was already nil as of March 31, 2026.
Background on First Games
First Games discontinued its real-money gaming operations following the Promotion and Regulation of Online Gaming Act, 2025. Its financial statements for the year ended March 31, 2026, were already prepared on a liquidation basis.
Market and Sector Impact
Shares of One 97 Communications ended Tuesday at ₹1,715.00 on the BSE, up ₹25.00, or 1.48%. The filing frames the order as a matter confined to a non-consolidated joint venture, and the stock's gain on the day came alongside the company's disclosure.
| Indicator | Reading | Change / Signal |
|---|---|---|
| One 97 Communications (BSE close) | ₹1,715.00 | +₹25.00 (+1.48%) |
| Consolidated impact (company statement) | No incremental financial impact | Neutral |
| Investment carrying value (Mar 31, 2026) | Nil | Already written down |
What to Watch
First Games is evaluating the appropriate course of action under the relevant statutory provisions, according to the company's filing. The filing does not specify a timeline or the route it may take, so any follow-up disclosure from One 97 Communications on the matter is the next item to track.