In a significant relief for Paytm-owned First Games, the Supreme Court of India has stayed proceedings related to a Rs 5712 crore GST notice issued by the DGGI, New Delhi.
The development was revealed in a regulatory filing by One97 Communications, the parent company of Paytm and its gaming arm, First Games. The show cause notice (SCN), issued in April 2025, prompted the gaming platform to move the apex court, seeking legal protection against the massive tax demand.
"We hereby inform you that First Games has informed us on May 24, 2025 at 10:44 am (IST) that in the writ petition …filed by First Games challenging the said SCN, the Hon'ble Supreme Court of India has on May 23, 2025 stayed the proceedings of the SCN," One97 Communications stated in its stock exchange filing.
The tax dispute arises from the classification and taxation of real money gaming platforms under the GST framework - a legal grey area that has triggered scrutiny and high-value tax demands across the online gaming industry. At the heart of the matter is whether platform fees in games involving real money stakes should attract 18% or 28% GST and how the taxable value is to be determined.
One97 Communications emphasized that the issue is not isolated to First Games. "The matter is industry-wide and under active judicial consideration," the company clarified, noting that similar petitions are already pending before the Supreme Court involving other online gaming companies.
The interim stay granted by the Supreme Court offers temporary relief to First Games, giving it room to navigate the complex and evolving regulatory environment. It also sets the stage for a potential landmark decision that could shape the future of taxation in India's fast-growing online gaming sector.
With billions of rupees at stake and legal clarity still emerging, the industry is closely watching the court's next moves.
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