Meesho's shares down 10% today: Here we decode why
What's the story
Meesho's share price has plummeted by a whopping 10% today. The fall comes after the e-commerce platform received an income tax demand of almost ₹1,500 crore for the assessment year 2023-24. The company said it would challenge the order through legal channels. The demand was made through an assessment order under Section 143(3) of the Income Tax Act and a demand notice under Section 156.
Tax controversy
E-commerce platforms often face similar tax disputes
Meesho's tax dispute isn't an isolated case but a common issue among e-commerce platforms. The problem usually arises when firms treat customer discounts and incentives as business expenses, reducing their taxable income. However, tax authorities have previously argued that some of these payments should not be fully deductible or should be classified differently for taxation purposes.
Past dispute
Meesho received a similar tax notice for FY22
Meesho also revealed in its IPO prospectus that it had received a similar tax notice for FY22. The income tax department had issued a show-cause notice on January 25, 2025, regarding proposed adjustments to its tax returns. These adjustments included the potential disallowance of certain advertising and communication expenses, mark-to-market gains on forward contracts, and TDS issues on certain foreign remittances.
Company stance
Company is currently evaluating the assessment order
In response to the show-cause notice, Meesho provided additional information and requested a hearing on February 7, 2025. However, on March 13 last year, the tax authority issued a series of orders including an assessment order and a demand notice raising a tax claim of ₹572 crore. "The company is currently evaluating the assessment order and does not concur with the observations and adjustments made," it said in its latest exchange filing.
Market performance
Meesho's shares opened at ₹147.60 per share
Meesho's shares opened at ₹147.60 apiece on the BSE today and is now trading at ₹143.20 (down 9.99%). Meesho had debuted in the stock market on December 10, 2025, with an IPO price band of ₹105-₹111 per share. It listed at around ₹162.50, giving the investors nearly 46% listing gains.