One 97 Communications Ltd, the parent of Paytm, on Tuesday (October 13) said the Goods and Services Tax (GST) demand against its subsidiary First Games Technology Pvt Ltd has been reduced to ₹703.66 crore from the earlier proposed liability of ₹5,712 crore for the period from April 2018 to March 2023.
The demand order was issued by the Additional Commissioner of Central Goods and Services Tax (CGST), Noida, Uttar Pradesh, with an additional penalty equivalent to the tax liability and 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. Paytm said the order would have no incremental financial impact on the company.
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First Games is evaluating the appropriate course of action under the relevant statutory provisions, according to the filing.
Why Paytm Said There Is No Incremental Financial Impact
Paytm said First Games is treated as a joint venture for group consolidation purposes under applicable accounting standards. Its revenue is therefore not consolidated in Paytm’s financial statements, while its share of profit or loss under the equity method was nil in Paytm’s consolidated profit and loss account for the financial year ended March 31, 2026.
The company also said 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.
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Paytm added that the carrying value of its investment in First Games in the consolidated financial statements was already nil as of March 31, 2026.
Details of the GST Demand Order
The order was issued 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.
The demand relates to tax liability for the period from April 2018 to March 2023. The penalty is equivalent to the tax amount, in addition to applicable interest.
Shares of One 97 Communications Ltd ended at ₹1,715.00, up by ₹25.00, or 1.48%, on the BSE.
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