Paytm gets relief as Supreme Court stays Rs 5,712 Cr GST notice

The Supreme Court of India has stayed the proceedings of a Rs 5,712 crore GST Show Cause Notice (SCN) issued to First Games Technology Private Limited, a subsidiary of One 97 Communications Ltd (Paytm).

Paytm shared the update in a regulatory filing on May 24, after the Supreme Court issued an interim order on May 23. The order came in response to a petition by First Games, which challenged a GST notice from the Directorate General of GST Intelligence (DGGI) for the period from January 2018 to March 2023.

In its order, the apex court directed, “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.”

The stay gives Paytm’s gaming arm temporary legal relief and more time to defend its case without facing immediate penalties.

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.