Paytm Shares Jump as Supreme Court Stays ₹5,712 Crore GST Notice on Gaming Arm

Unknown Apr 02, 2026 950 Views

Paytm’s shares surged 2.4% in early trade after the Supreme Court of India granted a major relief by staying a ₹5,712 crore ($674 million) GST notice against its gaming subsidiary, First Games Technology. The interim order, delivered on May 23, 2025, has brought temporary respite to One97 C...

Supreme Court Relief:

The apex court’s stay halts all proceedings related to the massive GST demand until the final adjudication of the matter. The Directorate General of GST Intelligence (DGGI) had issued the show cause notice in April, demanding GST at 28% on the total entry amount, as opposed to the 18% GST paid on platform fees by gaming companies. The stay order was granted after First Games filed a writ petition challenging the notice, which covers the period from January 2018 to March 2023.

Industry-Wide Impact:

The legal dispute is not limited to Paytm’s First Games but is part of a broader, industry-wide debate on how real money gaming platforms should be taxed under the GST regime. Several gaming companies are facing similar notices, and the Supreme Court’s decision to grant interim relief is seen as a signal that the court may take a closer look at the tax treatment of the entire sector.

Market Reaction:

Following the Supreme Court’s order, Paytm shares rose by 2.4% in early trading, reflecting renewed investor confidence. The stock closed at ₹412.1 on Friday, up 1.8%, despite being down 14% year-to-date. Analysts note that the interim relief provides breathing space for Paytm and other gaming firms, though the final outcome will depend on the Supreme Court’s eventual ruling.

Financial Context:

Paytm reported a 16% year-on-year decline in operating revenue for Q4 FY25, but managed to narrow its net loss to ₹23 crore, a significant improvement from the ₹536 crore loss a year earlier. The company emphasized that the GST matter is being closely monitored by all stakeholders in the online gaming industry.

Outlook:

The Supreme Court’s stay offers much-needed relief to Paytm and the online gaming sector, but the industry remains on edge as the legal battle over GST classification and valuation continues. Investors and gaming companies alike will be watching closely as the case proceeds, with the potential to set a precedent for the future of digital gaming taxation in India.

Sources: Economic Times, NDTV, Moneycontrol, Financial Express, Entrackr

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