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India’s digital commerce landscape is facing a major regulatory test as the Income Tax Department intensifies its scrutiny of platform-based revenues. India Digital & E-commerce Tax compliance has become the focal point of a significant legal battle after Meesho Limited disclosed receiving a tax demand notice totaling INR 1,499.74 crore. The assessment order, issued on March 5, 2026, pertains to the Assessment Year 2023-24 and includes substantial interest charges stemming from additions and adjustments to the company’s reported income.
The Bengaluru-based unicorn, which recently listed on the stock exchanges, has formally expressed its disagreement with the tax department’s findings. According to regulatory filings, Meesho believes it has strong legal and factual grounds to contest the order and is preparing to file an appeal. This development follows a nearly identical scenario from the previous fiscal year, where a similar demand for AY 2022-23 was stayed by the Karnataka High Court in April 2025—a matter that remains sub-judice.
For the broader sector, this notice highlights a growing trend of aggressive tax positioning by Indian authorities toward high-growth digital platforms. The disputes often center on the disallowance of high advertisement and communication expenses, alongside complex treatments of foreign remittances. While Meesho maintains that these proceedings will not have a material adverse impact on its immediate financial position or operations, the recurring nature of these billion-rupee demands underscores the persistent complexity of India Digital & E-commerce Tax reporting for multinational and domestic tech leaders alike.
