Paytm’s Gaming Arm First Games Gets Rs 5,712 Cr GST Notice

One 97 Communications, the parent company of First Games, has received a show cause notice (SCN) from the GST department, demanding Rs 5,712 crore in unpaid taxes, interest, and penalties.

The notice is linked to a broader tax issue in the online gaming industry.

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First Games received the notice on April 28, 2025, stating that 28% GST should be charged on the full entry amount, not just on platform fees, which is a debated issue in the online gaming sector. The tax demand covers January 2018 to March 2023.

"This is an industry-wide issue where the GST department has sent notices to several gaming companies previously. This matter is currently pending with the Honourable Supreme Court and they have granted interim relief by staying further proceedings," Paytm informed stock exchanges BSE and NSE.

Paytm said the notice won’t affect its operations, as First Games is treated as a joint venture and its financial impact is minimal—less than 1% of Paytm’s consolidated profit or loss for FY24.

First Games plans to file a legal petition against the GST notice, challenging the ₹5,712 crore tax demand. The company will argue that applying the 28% GST rate retroactively—before it came into effect on October 1, 2023—is not valid. It also plans to seek temporary relief, similar to what other gaming firms have received.

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