One 97 Communications Ltd’s shares edged up 1.48%, closing at ₹1,715 on the BSE, as the company announced a dramatic reduction in the GST demand against its subsidiary First Games Technology. The demand fell from ₹5,712 crore to ₹704.66 crore for the period April 2018‑March 2023, a cut of roughly 87%.
The order, issued by the Additional Commissioner of Central GST in Noida, also imposed a penalty equal to the tax liability and applicable interest, a common practice under Section 74 of the CGST Act. First Games received the notice on 12 Oct 2026, after a show‑cause notice dated 28 Apr 2025 had set the original liability.
According to the company’s filing, the subsidiary is treated as a joint venture for consolidation purposes, but its revenue and profit are not consolidated under the equity method, resulting in a nil share of profit or loss for the FY ended 31 Mar 2026. The carrying value of the investment was already zero as of that date, so the renewed GST demand does not alter One 97’s consolidated accounts.
First Games had ceased real‑money gaming operations following the Promotion and Regulation of Online Gaming Act 2025, and its financial statements for the year ended 31 Mar 2026 were prepared on a liquidation basis. The company’s statement that the GST demand poses no incremental impact reflects the fact that the subsidiary’s books were already closed to the market.
Looking ahead, One 97 has not issued new guidance, but the company will report its Q1 2026 results on 30 June. Investors will likely focus on whether the reduced tax exposure improves cash flow projections and whether the company will explore other gaming ventures once regulatory uncertainty subsides.