The corporate mentioned it’s evaluating the order and that the demand discover doesn’t have any materials adversarial impression on its financials. “As per the evaluation order… the revenue tax division has made sure additions/changes to the revenue reported by the corporate,” Meesho mentioned in its submitting, including that the quantity additionally consists of curiosity on unpaid taxes.
Giant tax disputes for ecommerce marketplaces usually come up from a couple of recurring points. Whereas Meesho’s disclosure doesn’t specify the precise adjustment, such instances typically relate to corporations treating buyer reductions and incentives as enterprise bills, thereby decreasing taxable income. Tax authorities in earlier instances have argued that a few of these funds shouldn’t be absolutely deductible or needs to be handled in another way for tax functions.
Meesho mentioned it had earlier obtained an analogous tax discover for fiscal 2022, which it challenged in courtroom. In its IPO prospectus, the ecommerce platform disclosed that the revenue tax division had issued a show-cause discover on January 25, 2025, for the evaluation yr 2022-23, looking for explanations for sure proposed changes to its tax filings. A monetary yr refers back to the interval by which revenue is earned (April–March), whereas the evaluation yr is the next yr by which that revenue is reviewed and taxed.
The proposed changes included the potential disallowance of sure commercial and communication bills, the tax therapy of mark-to-market beneficial properties on ahead contracts, and points associated to tax deducted at supply (TDS) on sure overseas remittances. Meesho responded to the discover on February 7, 2025, submitting further info and looking for a listening to.
Nonetheless, on March 13 final yr, the tax authority issued a collection of orders together with an evaluation order and demand discover elevating a tax demand of Rs 572 crore.
The corporate challenged these orders within the Karnataka Excessive Courtroom on April 9, arguing that the evaluation was flawed and violated ideas of pure justice. On April 17, the excessive courtroom granted an interim keep on the tax demand, and the matter stays pending earlier than the courtroom.
“The corporate is presently evaluating the evaluation order and doesn’t concur with the observations and changes made… The corporate believes that it has ample authorized and factual grounds to contest the identical and is taking crucial steps to guard its curiosity,” it mentioned within the newest change submitting.
Meesho reported a 13-fold soar in internet losses for the October–December quarter to Rs 491 crore, whereas working income rose 31% to Rs 3,517 crore.
On Friday, Meesho’s shares closed at Rs 159.1, up 0.4% on the BSE.
