The Goods and Services Tax (GST) demand against First Games Technology, a subsidiary of Paytm parent One 97 Communications, has been reduced sharply to ₹703.66 crore from the earlier proposed liability of ₹5,712 crore.
The revised assessment covers transactions between April 2018 and March 2023, according to a regulatory disclosure by One 97 Communications.
The company said First Games received the order on Oct 12, 2026, from the Additional Commissioner of Central Goods and Services Tax (CGST), Noida, Uttar Pradesh.
The revised liability represents a reduction of approximately 87.7% from the original proposed tax demand.
The latest order imposes a GST demand of ₹703.66 crore, along with an equivalent penalty and applicable interest.
The tax and penalty components together amount to ₹1,407.32 crore, excluding interest.
The original show-cause notice, issued on April 28, 2025, had proposed a tax liability of ₹5,712 crore, with additional interest and penalties.
The revised order concerns the same assessment period and substantially reduces the principal tax demand.
One 97 Communications said First Games was examining the order and evaluating remedies available under the relevant statutory provisions.
The company has not disclosed whether the entity intends to challenge the assessment.
'Revised GST Order To Have No Financial Impact'
One 97 Communications maintained that the revised tax demand would not create any additional financial impact on its consolidated accounts.
Although First Games is identified as a subsidiary, it is treated as a joint venture for group consolidation purposes.
Consequently, its revenue is not included in the parent's consolidated financial statements.
For the financial year ended March 31, 2026, the group's share of First Games' profit or loss under the equity method was nil.
The carrying value of its investment in the gaming entity was also nil at the financial year-end.
First Games discontinued its real-money gaming operations following the enactment of the Promotion and Regulation of Online Gaming Act, 2025.
Its financial statements for the year ended March 2026 were prepared on a liquidation basis.
The revised assessment reduces the disputed tax amount considerably, although the associated penalty, interest and possible legal proceedings remain relevant.
