Paytm hit with second GST demand, total liability reaches Rs 8.66 Cr

Adding to its mounting regulatory challenges, One 97 Communications Limited on Wednesday said it received a second tax demand from the Central Goods and Services Tax (CGST) Department on February 4, 2025.

The latest demand imposes a GST liability of Rs 7.47 crore, including tax and penalty, for allegedly availing wrongful input tax credit (ITC) for FY 2017-18, the parent company of Paytm informed the Indian stock exchanges.

The development comes hours after the CGST Department issued a demand order to Paytm on February 3, Monday, for Rs 1.19 crore, relating to alleged non-compliance with tax invoice regulations for financial years 2020-21, 2021-22, and 2022-23.

The CGST department claims the fintech company violated the provisions of the Goods and Services Tax Act, 2017.

In addition to the penalty on the company, CEO Vijay Shekhar Sharma has been personally fined Rs 59.9 lakh.

In both cases, Paytm has maintained that the demands are not legally tenable and is evaluating its options, including filing appeals. “The Company, based on its assessment and expert advice, believes that the demand is not maintainable and is evaluating all options, including filing an appeal against the order,” it said in stock exchange filings.

Despite the financial liability totalling Rs 8.66 crore across both orders, Paytm has clarified that its operations remain unaffected. The company has assured stakeholders that it will take appropriate legal steps to contest the demands.

In August last year, One 97 Communications was ordered by the Office of Collector of Stamps, New Delhi, to pay a penalty of Rs 47.12 lakh for not paying stamp duty on the allotment of equity shares in previous years.

Similarly, the GST department raided a fully-owned subsidiary of insurtech giant PB Fintech, Policybazaar's parent entity, on December 13. According to an exchange filing, the company said the Directorate General of GST Intelligence, Gurugram zonal unit, conducted a search and inquiry related to certain vendors associated with one of its subsidiaries.