Meesho Receives ₹1,500 Cr Income Tax Demand, Second Major Tax Battle in Two Years

Newly listed e-commerce company Meesho has received a tax demand notice of around ₹1,500 crore plus interest from the assessment unit of the Income Tax Department, according to exchange filing data released on Friday.

The assessment order was issued under Section 143(3) of the Income-tax Act, 1961 along with a demand notice under Section 156 for the Assessment Year 2023–24.

Section 143(3) of the Income-tax Act relates to scrutiny assessment, under which an assessing officer (AO) conducts a detailed examination of a taxpayer’s return. During this process, the officer reviews accounts, documents and supporting evidence to verify the accuracy of reported income, deductions and exemptions.

Meesho’s Alleged Violation & Response

As per the filing, the alleged violation relates to certain additions and adjustments made by the Income Tax Department to the income reported by the company.

Commenting on the notice, Meesho said it is “currently evaluating the Assessment Order and does not concur with the observations and adjustments made in the Assessment Order. The Company believes that it has adequate legal and factual grounds to contest the same and is taking necessary steps to protect its interest.”

Notably, a similar demand order was issued for the previous Assessment Year 2022–23, which was disclosed in the company’s prospectus dated December 5, 2025. As stated in the filing, the High Court of Karnataka granted an interim stay on the earlier demand notice on April 17, 2025, and the matter is currently pending before the court.

The company also stated that the latest assessment order and demand notice do not have any material adverse impact on its financial position, operations or other business activities.

Meesho Financials

Meesho reported a consolidated net loss of ₹490.7 crore for the third quarter of FY26, nearly 13 times higher than the ₹37.4 crore loss recorded in the same period last year. Losses also widened sequentially from ₹411 crore in Q2 FY26, even as revenue continued to grow.

The company’s total revenue rose 14% quarter-on-quarter to ₹3,518 crore, up from ₹3,074 crore in the July–September quarter, while registering a 32% year-on-year increase compared with ₹2,674 crore in Q3 FY25.

However, total expenses increased sharply during the quarter, rising 44% year-on-year to ₹4,071.3 crore, compared with ₹2,822.8 crore a year earlier and ₹3,540.4 crore in the previous quarter. The surge in costs weighed on profitability despite strong growth in orders and user activity.