Key Development
The Hon'ble Supreme Court of India upheld on May 27, 2026 that the 28% GST levy on online gaming companies is constitutionally valid and has statutory backing under the GST Act.
Subsidiary Information
First Games Technology Private Limited (FGTPL) was incorporated on November 13, 2017 and was engaged in online real money gaming business. The real money gaming business was discontinued with effect from August 25, 2025, pursuant to the promulgation of "The Promotion and Regulation of Online Gaming Act, 2025".
GST Matter Details
FGTPL received a Show Cause Notice from GST on April 28, 2025 with a proposed liability of ₹5,712 crores (as mentioned in the SCN) along with applicable interest and penalties, for the period from January 2018 to March 2023. The matter remains pending for adjudication as of the disclosure date.
Financial Impact Assessment
The carrying value of investment in FGTPL in the consolidated financial statements of One 97 Communications Limited as on March 31, 2026 is already nil. Accordingly, there is no incremental impact on OCL's consolidated financial statements arising from this matter.
Accounting Treatment
FGTPL is considered as a joint venture for group consolidation purposes under applicable accounting standards. Accordingly, its revenues are not consolidated in OCL's financial statements. The share of profit or loss under the equity method is nil in OCL's consolidated profit and loss account for the financial year ended March 31, 2026.
Operational Impact Clarification
The matter relates specifically to the discontinued online real money gaming business of FGTPL and does not impact the operations or other business activities of One 97 Communications Limited.
Additional Information
The disclosure will be hosted on the Company's website at https://ir.paytm.com/.