Meesho faces Rs 1,500 crore tax demand; plans legal challenge
E-commerce platform Meesho has received a tax demand of approximately ₹1,500 crore from the Income Tax Department for the assessment year 2023-24. The company disputes the demand, citing alleged under-reporting of income, and plans to contest the order legally, asserting it will not significantly impact its operations.
Key Highlights
- Meesho disputes ₹1,500 crore tax demand from Income Tax Department.
- The demand is for alleged under-reporting of income for AY 2023-24.
- Company plans to legally challenge the tax order.
- Meesho asserts no significant impact on its operations.
- This is a repeat of a similar tax demand from the previous year.
- The company is reviewing the assessment order.
Bengaluru-based e-commerce platform Meesho has been issued a tax demand notice of approximately ₹1,500 crore from the Income Tax Department for the assessment year 2023-24. The demand, which reportedly totals ₹1,499.74 crore including interest, stems from alleged under-reporting of income and subsequent adjustments made by the tax authorities during their assessment of Meesho's financial records. The assessment order was issued under Section 143(3) of the Income-tax Act, 1961, along with a demand notice under Section 156 of the same act, both dated March 5, 2026.
Meesho, however, has stated that it does not agree with the observations and adjustments made by the Income Tax Department and plans to contest the demand. The company believes it possesses adequate legal and factual grounds to dispute the order and is taking necessary steps to protect its interests. Meesho has also clarified that it does not expect the tax demand to have any immediate material impact on its business operations or financial stability, expressing confidence in its legal position.
This is not the first time Meesho has faced a significant tax demand. The company had previously received a similar tax notice for the assessment year 2022-23. In that instance, the Karnataka High Court had granted an interim stay on the demand notice in April 2025, and the matter remains pending. Such tax disputes are not uncommon for rapidly growing technology companies, especially those operating large online marketplaces with complex transaction structures and numerous sellers.
Large tax disputes for e-commerce marketplaces in India often arise from issues such as how companies treat customer discounts and incentives, which can reduce taxable profits. Tax authorities sometimes argue that these payments should not be fully deducted or should be treated differently.
Under Section 270A of the Income-tax Act, 1961, penalties can be imposed for underreporting or misreporting of income, ranging from 50% to 200% of the tax due, depending on the nature of the discrepancy. Misreporting can include suppression of information, failure to record investments, claiming unsubstantiated expenses, or recording false entries.
Meesho, founded in 2015 by IIT Delhi graduates Vidit Aatrey and Sanjeev Barnwal, is a prominent e-commerce platform in India, known for connecting small businesses and individual sellers with customers across the country, particularly in tier-2 and tier-3 cities.
The company disclosed this development in compliance with SEBI Listing Regulations on March 6, 2026. The news was widely reported across various financial news outlets around March 6-7, 2026.
The Income Tax Department's assessment under Section 143(3) involves a detailed investigation of a filed return to verify the accuracy of income and deductions.
As of the latest reports, Meesho is actively reviewing the assessment order and preparing its legal challenge. The company's stance is that the demand is unjustified and that it has strong grounds to contest it through appropriate legal remedies.
Frequently Asked Questions
What is the total amount of the tax demand issued to Meesho?
Meesho has received a tax demand notice totaling approximately ₹1,500 crore, which includes applicable interest.
What is the reason for the tax demand against Meesho?
The Income Tax Department has raised the demand due to alleged under-reporting of income by Meesho for the assessment year 2023-24, leading to certain additions and adjustments made by the tax authorities.
Will Meesho pay the tax demand?
No, Meesho disputes the tax demand and has stated that it has adequate legal and factual grounds to contest the order. The company plans to challenge it through legal channels.
Has Meesho faced similar tax demands before?
Yes, Meesho had previously received a similar tax demand for the assessment year 2022-23, which is currently under legal challenge with an interim stay granted by the Karnataka High Court.