GST Demand on Paytm Unit First Games Reduced to Rs 704 Crore

what happened

The goods and services tax demand against First Games Technology, a subsidiary of One 97 Communications, the parent of Paytm, has been lowered to Rs 703.66 crore, according to a stock exchange filing by the company. The earlier proposal was Rs 5,712 crore for April 2018 to March 2023. The revised order came from the Noida office of the Central GST authority and was received on 12 October 2026. A penalty equal to the tax and applicable interest still apply.

One 97 Communications said the order will not have any incremental financial impact on the group. First Games is accounted for as a joint venture, so its revenue is not consolidated. Its share of profit or loss under the equity method was nil for the year ended 31 March 2026, and the carrying value of the investment was also nil.

The original show-cause notice, dated 28 April 2025, proposed the larger figure. First Games has stopped real-money gaming after the Promotion and Regulation of Online Gaming Act, 2025 took effect, and its 2026 accounts were prepared on a liquidation basis. The company is weighing its options under the law but has not said what the subsidiary will do next.

why it matters

For Paytm shareholders, the lower demand barely changes consolidated figures, since the unit sits outside consolidation and its investment is carried at zero. The case still shows the regulatory risk facing Indian online gaming businesses after the 2025 law. This is informational, not an investment recommendation.

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