A GST Penalty Imposed on Paytm's CEO for Alleged Non-Compliance

A GST Penalty Imposed on Paytm's CEO for Alleged Non-Compliance
Paytm CEO Faces GST Penalty for Alleged Non-Compliance

The Central Goods and Services Tax (CGST) Department has penalised the fintech business Paytm and its CEO, Vijay Shekhar Sharma, for allegedly failing to issue tax bills to its clients in a compliant manner. Sharma was penalised INR 59.94 lakh for the penalty, while One97 Communications, the company that runs the Paytm brand, was fined INR 1.19 crore.

The Noida-based business stated that it was considering all of its options, including appealing the Joint Commissioner, CGST Delhi North's ruling. According to Paytm's official statement, the business is considering all of its options, including appealing the order, and feels that the penalty demand cannot be maintained based on its evaluation and professional counsel.

Earlier, RBI Also Imposed Penalty on Paytm

The company's affiliated entity, Paytm Payments Bank, was fined INR 5.39 crore by the Reserve Bank of India (RBI) in October 2023 for a number of violations, including Know Your Customer (KYC) regulations.

In the third quarter of the fiscal year 2025 (Q3FY25), the company's losses decreased from INR 219.8 crore in Q3FY24 to INR 208.3 crore. The loss comes after the company recorded a profit of INR 928.3 crore for the September quarter, which was primarily driven by the sale of its movie and ticketing business to Zomato.

Sharma Positive for Business Operations in 2025

Regarding the company's financial future, Sharma told a media outlet that the company is determined to turn a profit the following quarter—EBITDA before ESOP. He continued by saying that the company's substantial cash reserves and cost-effective cost structure are key factors in the company's impending profitability.

Sharma voiced hope about regaining lost ground regarding Paytm's market share in the UPI ecosystem, which has significantly decreased to 5.5%. "We weren't allowed to onboard at all," he explained, attributing the fall to regulatory obstacles rather than problems with trust. The regulatory understanding caused us to halt our operations. After that, I'm thrilled that we're gaining millions of new clients without spending any money on marketing."

Sharma outlined a well-defined recovery plan that prioritised product innovation and increased UPI ecosystem engagement. "It’s a product gap, deeper integration into the UPI ecosystem, and more merchant acquisition, which creates a flywheel that will bring our consumer back," he stated. Sharma pointed out that Paytm has a competitive advantage thanks to its robust product features and well-known brand.

Paytm Looking to Expand Its Market Share

Regarding market share, Sharma said that it must increase rationally and that there is a network impact at the same time. "The major thing is still bigger, and there is a small amount; we could attract more clients if we could add additional features and services. Retaining customers is more about the qualities of the product and how it fits into their life. I can assure you that the best part is that our brand remembers the features and the service; if we can restore them, market share will return," he added.


The 1% Club by Sharan Hegde Secures SEBI RIA Licence
The 1% Club, founded by Sharan Hegde, has secured an RIA licence from SEBI, enabling it to offer registered investment advisory services in India.

WIDGET: questionnaire | CAMPAIGN: Simple Questionnaire 

Must have tools for startups - Recommended by StartupTalky

Read more