The Supreme Court of India has granted interim relief to First Games Technology Private Limited, a subsidiary of One97 Communications Ltd (Paytm), by staying proceedings related to a ₹5,712 crore Goods and Services Tax (GST) Show Cause Notice (SCN).
In a regulatory filing dated May 24, Paytm confirmed that the apex court issued the interim order on May 23 in response to a petition filed by First Games. The petition challenged the GST demand raised by the Directorate General of GST Intelligence (DGGI) for the period spanning January 2018 to March 2023.
The Supreme Court, in its directive, stated:
“Further proceedings of all the impugned show cause notices shall remain stayed till the final disposal of the main matter along with all the matters which are tagged.”
This stay provides First Games with temporary legal relief and additional time to present its defense, effectively pausing any immediate enforcement action or penalties related to the SCN.
The development marks a significant moment in Paytm’s ongoing regulatory challenges and offers breathing room as the case proceeds through the judicial process.
Earlier, Paytm said the notice is part of an ongoing issue in the online gaming industry. The disagreement is about GST being charged at 28% on the full entry amount, while gaming companies believe it should be 18% only on their actual earnings from platform fees.
The SCN is part of a broader industry-wide probe by the GST department, which has issued similar notices to several gaming companies. The matter is being closely monitored by stakeholders across the online gaming sector.
Paytm’s operating revenue fell by 16% year-on-year to Rs 1,911 crore in the fourth quarter of FY25, down from 2,267 crore in the same quarter of FY24. However, the Noida-based company narrowed its losses to 23 crore in Q4 FY25, a 96% reduction from 536 crore in Q4 FY24.
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