Paytm's gaming arm owes ₹1,407 crore, but Paytm already wrote it off

Companies No. 70 14 October 2026 · 2 min read

On 12 October 2026, a GST order on First Games Technology, a Paytm company that ran real-money games, cut the tax demand by 88%, from ₹5,712 crore to ₹704 crore. Paytm says the impact on itself is nil.

The cut is real: both figures are the tax alone, for April 2018 to March 2023. But an equal penalty doubles the bill to ₹1,407.32 crore, plus interest the filing does not put a number on. It gives no reason for the cut.

The bill sits with First Games, which was shrinking long before it. Its turnover fell 72%, from ₹320.58 crore in FY23 to ₹90.82 crore in FY25, its net worth was minus ₹267.08 crore by March 2025, and it shut its games on 25 August 2025 after a new online gaming law. The bill is 4.4x its turnover in FY23, the last year the tax covers.

Paytm's nil is an accounting answer. It had already written its loan and shares in First Games down to zero. In April 2026 it approved turning that ₹197 crore loan into shares, lifting its stake from 55% to 82.6%. But it books First Games as a joint venture, counting only its share of the profit or loss, which was nil for FY26.

The ₹704 crore headline is half the bill, and Paytm's nil does not mean the bill went away. Paytm already took its loss when it wrote First Games down, so the order adds nothing new to its books. The filings do not say how a shut company with negative net worth will pay or contest ₹1,407 crore plus interest.

A bar of the ₹1,407 crore that the October 2026 GST order asks of Paytm's First Games, before interest: half is the ₹704 crore of tax, the figure in the headlines, and half is a penalty of the same ₹704 crore.

Stream of First Games' owners: Paytm 55% and other shareholders 45% before; Paytm 82.6% and others 17.4% after Paytm turns its loan into shares, as approved in April 2026.

Sources