One 97 Communications Subsidiary Hit With Rs 703.66 Crore GST Demand

GST Demand: Rs 703.66 crore | Previous SCN: Rs 5,712 crore

Reader Takeaway: Subsidiary demand is significant, but One 97's consolidated financials are shielded due to nil investment valuation.

What just happened

One 97 Communications Limited (Paytm) has disclosed that its subsidiary, First Games Technology Private Limited (FGTPL), received a GST demand order from the Additional Commissioner of CGST, Noida. The order covers the period from April 2018 to March 2023, quantifying a total liability of Rs 703.66 crore, inclusive of an equivalent penalty and applicable interest. This order represents a substantial reduction from the initial show-cause notice of Rs 5,712 crore issued in April 2025.

Why this matters

While the headline figure of Rs 703.66 crore is large, One 97 Communications has confirmed it faces no incremental financial impact from this development. FGTPL is accounted for as a joint venture, and its financials are not consolidated into the parent company’s results. Furthermore, the parent firm’s carrying value of its investment in FGTPL is already recorded as nil in the consolidated financial statements as of March 31, 2026.

Operational Context

FGTPL has already ceased its real-money gaming operations following the implementation of the Promotion and Regulation of Online Gaming Act, 2025. Consequently, the entity’s financial statements for the fiscal year ending March 2026 were prepared on a liquidation basis. The parent company noted that its share of profits or losses from this joint venture for the same period was zero.

What to track next

Management is currently evaluating the legal and statutory options to address the GST demand order. Investors will monitor any potential appeals or regulatory updates regarding the closure of the subsidiary's tax liabilities.