GST notice of 5712 crores to Paytm’s Gaming Company First Games, preparations to challenge in court
New Delhi:
Paytm’s parent company One 97 Communications LTD has reported that its subsidiary first games Technology Pvt Ltd has received a big reason from the GST Department (DGGI) to the GST Department (DGGI). In this, a tax outstanding of about Rs 5712 crore has been reported on the company, which is from January 2018 to March 2023. Along with this, interest and fine have also been sought by adding.
There is a big controversy over GST
Paytm has said that this is not just the case of their company, but the entire online gaming industry issue, which has been in dispute for the last 18 months. DGGI says that gaming companies should give 28% GST on total entry amount, while so far companies have been giving 18% GST only on platform fees.
Many gaming companies have received notice
Paytm said that many online gaming companies have received such notices before. This case is pending in the Supreme Court and the court has also given relief to many companies. On the basis of these, the first games are also going to file a petition in the court, so that the tax notice can be challenged on a legal basis.
The company said- the implementation of tax from the old date is wrong
First Games say that this notice has been implementing the changes in the GST rules on 1 October 2023 since ancient times, which is not right to law. The company will seek interim relief from the court, as the rest of the companies have received.
No effect on Paytm’s business
Paytm has made it clear that this notice will not affect its main operations, as First Games are treated like a joint venture (JV). The share of this JV in the company’s total profits or disadvantages is less than 1%.
Paytm investment in first games
Paytm also said that the company’s investment in First Games has already been Rs 0 (till March 31, 2024). Now the company has a financial exposure of only about 225 crore rupees (till 31 December 2024), which is in the form of shareholder loan.
