During Monday’s trading session, the shares of India’s leading digital ecosystem for consumers as well as merchants slumped nearly 3 percent on BSE, after the company received relief for a GST notice worth Rs. 5,712 crores from the Supreme Court for its gaming subsidiary.
With a market cap of Rs. 55,217.4 crores, at 12:31 p.m., the shares of One 97 Communications Limited (Paytm) were trading in green at Rs. 865.6 on BSE, up by nearly 2.5 percent, as against its previous closing price of Rs. 844.25. The stock has delivered multibagger returns of more than 142 percent in one year, but has fallen by nearly 2 percent in the last one month.
What’s the News
One 97 Communications Limited (Paytm) has informed that the Supreme Court has granted a stay on proceedings related to a Goods and Services Tax (GST) demand notice, amounting to Rs. 5,712 crore, to its gaming arm, First Games Technology Private Limited. The notice was issued by the Directorate General of GST Intelligence (DGGI), New Delhi.
The interim stay granted by the Supreme Court offers temporary relief to First Games and indicates a broader legal examination of how India’s tax authorities are applying GST regulations to the fast-growing real money gaming industry.
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Previous Related Updates
On 28th April, the company had informed that its subsidiary, First Games, received a Show Cause Notice (SCN) from the DGGI concerning an ongoing GST issue in the online gaming industry, which has been under scrutiny for over 18 months.
The DGGI has taken the position that GST should be levied at 28 percent on the total entry amount, as against 18 percent GST paid on the platform fee (revenue) generated by the gaming companies.
In line with the industry, on the same day, First Games filed a writ petition challenging the SCN on legal grounds, seeking interim relief similar to others in the gaming industry. Through this petition, First Games challenged the proposed liability of Rs. 5,712 crore, including applicable interest and penalties, covering the period from January 2018 to March 2023.
Financials
One 97 Communications reported a decline in revenue from operations, experiencing a year-on-year decrease of nearly 16 percent, falling from Rs. 2,267 crores in Q4 FY24 to Rs. 1,912 crores in Q4 FY25. In contrast, during the same period, the company’s net loss declined marginally by about 1 percent YoY, from Rs. 550 crores to Rs. 545 crores.
About the Company
One 97 Communications (Paytm) Limited is one of India’s leading payment solutions providers in India with a digital ecosystem offering consumers and merchants a wide range of services, including comprehensive payment solutions, payment facilitator services, facilitation of consumer and merchant lending, wealth management, insurance broking services, and more.
Written by Shivani Singh
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