Meesho Tax Disputes Surpass Rs 2,071 Crore in FY26 Even as Revenue and User Base Grow

E-commerce firm Meesho has reported a more than threefold increase in its tax disputes, touching Rs 2,071.8 crore in the financial year 2025-26, according to the company's annual report. The total disputed amount stems from two separate income tax demand notices received by the company.

During the fiscal year 2024-25, Income Tax authorities had raised a demand notice of over Rs 572 crore. Meesho challenged this notice in court and successfully secured a stay order. Subsequently, for assessment year 2023-24, income tax authorities made additions to the taxable income declared, raising a further demand of Rs 14,997.38 million along with a show-cause notice for penalty proceedings under Sections 274 and 270A of the Income-tax Act, 1961.

In response to the latest assessment order, Meesho stated that it has filed a rectification request with the Deputy Commissioner of Income Tax and has also submitted an appeal before the National Faceless Appeal Centre in Delhi.

Despite the regulatory and tax hurdles, Meesho posted notable operational and financial growth during FY26. The company's annual consolidated revenue increased to Rs 12,626 crore, up from Rs 9,390 crore in the previous fiscal year. Simultaneously, the company reported a narrower loss of Rs 1,358 crore for FY26, compared to a loss of Rs 3,942 crore in FY25.

Vidit Aatrey, Chairman, Managing Director and Chief Executive Officer of Meesho, stated that the company deliberately increased spending on user acquisition and technology during the year. According to Aatrey, contribution margin and free cash flow stepped back as the firm chose to fund consumer acquisition and build capability ahead of future revenue generation.

The company recorded a 33 per cent increase in its user base, reaching 26.4 crore users in FY26. Additionally, annual transacting sellers grew by 87 per cent to 9.61 lakh. Meesho's fulfillment infrastructure during the period comprised 18,000 logistics partners and approximately 120,000 delivery agents. Content-led commerce also emerged as a key growth driver, with 63,213 active content creators generating over 1.4 million pieces of order-generating content on the platform.

Aatrey noted that investments were tested against long-term return thresholds and expressed expectations that these expenditures would compound into a larger, more engaged, and lower-cost-to-serve user base in the coming years.

"The financial results of Meesho for FY26 present a dual narrative that is increasingly common in growth-stage tech companies. On the operational front, scaling revenue to over Rs 12,600 crore while narrowing losses and expanding the seller and user base indicates strong market demand and solid top-line execution. However, the threefold escalation in tax disputes highlights the critical importance of robust tax and regulatory compliance as startups scale. Managing legal and tax contingencies effectively will be essential alongside capital deployment strategies to ensure sustainable long-term growth." — Dr. Shishir Gupta, Founder & CEO, StartupLanes