Tax

Indian social commerce platform Meesho has reportedly received an income tax notice demanding nearly Rs 1,500 crore from authorities, marking one of the most significant tax disputes involving a fast-growing startup in recent years. The notice is understood to relate to questions around tax liabilities tied to the company’s operational and financial structures. While Meesho is reviewing the order and may challenge it through legal channels, the development highlights increasing regulatory scrutiny on India’s digital commerce sector.

Indian e-commerce platform Meesho has received a tax demand notice from authorities, drawing attention to regulatory compliance challenges faced by fast-growing digital marketplaces. The notice reportedly relates to alleged discrepancies in tax payments and financial reporting for a specified assessment period. While the company is expected to review the claims and respond through legal or administrative channels, the development highlights increasing scrutiny of the digital commerce sector by tax authorities.

Central GST authorities in Gurugram have dismantled an alleged fake invoicing racket involving fraudulent input tax credit claims, intensifying the government’s campaign against tax evasion under the Goods and Services Tax regime. Officials from the Central Goods and Services Tax (CGST) department conducted coordinated searches and identified multiple shell entities that allegedly generated bogus invoices without actual supply of goods or services. The operation is part of a broader nationwide enforcement drive aimed at protecting revenue and enhancing tax compliance.

India’s gross Goods and Services Tax (GST) collections rose 8.1% year-on-year to Rs. 1.83 lakh crore in February, reflecting sustained domestic consumption and stable compliance levels. The increase underscores resilient economic momentum despite global uncertainties and sector-specific headwinds. Both goods and services segments contributed to the revenue uptick, supported by improved invoicing efficiency and digital monitoring systems. Analysts view the steady growth in GST receipts as an indicator of broad-based commercial activity and formalization trends within the economy.

Rishi Gupta, managing director and chief executive officer of Fino Payments Bank, has been arrested by tax authorities in connection with an ongoing investigation into alleged financial irregularities. The development has sent ripples across the banking and fintech sectors, raising questions about governance standards and regulatory compliance within India’s fast-growing payments ecosystem. While officials have not disclosed detailed charges, the enforcement action underscores intensifying scrutiny of financial institutions.

India’s evolving tax architecture is increasingly being positioned as a catalyst for inclusive economic development. Policymakers are advancing reforms aimed at widening the tax base, simplifying compliance and improving revenue buoyancy while fostering equitable growth. The renewed focus on rationalization of direct and indirect taxes seeks to stimulate private investment, strengthen public finances and enhance welfare delivery. Economists argue that a balanced tax framework—one that promotes efficiency without undermining social equity—will be central to sustaining high growth rates.

India and France have amended their Double Taxation Avoidance Convention to refine rules governing tax residency and income attribution. The revised framework is aimed at reducing ambiguity, preventing tax evasion, and ensuring fair taxation of cross-border income. By aligning residency-based taxation principles with evolving global standards, the amendment provides greater certainty for businesses, investors, and individuals operating between the two jurisdictions.

India’s direct tax collections increased 9.4 percent year-on-year to Rs 19.44 lakh crore, reflecting sustained economic activity, improved compliance and steady corporate profitability. The growth in collections underscores resilience in income tax and corporate tax receipts despite global macroeconomic uncertainty. Stronger advance tax payments and better enforcement mechanisms contributed to the rise, reinforcing the government’s fiscal position. Analysts view the uptick as indicative of broad-based income expansion and formalization within the economy.

Proposals to increase taxes on cigarettes have reignited debate around their broader economic and fiscal consequences. While higher excise duties are often positioned as a public health tool and a means to bolster government revenues, industry observers warn of unintended outcomes. A sharp rise in cigarette taxes can accelerate the growth of illicit trade, undermining legitimate businesses and eroding tax collections. The experience of past tax hikes suggests that excessive levies may push consumers toward unregulated markets, weakening both enforcement and revenue predictability.

Foreign companies investing in or operating India-focused data centers do not face additional tax risk merely due to their involvement in such infrastructure, easing concerns around permanent establishment and income attribution. The clarification offers regulatory comfort at a time when India is positioning itself as a global hub for data storage and digital services. With demand for cloud computing, artificial intelligence, and digital infrastructure accelerating, the assurance removes a key overhang for overseas investors.