Meesho rejects claims about its goods and services tax (GST) treatment and says the allegations made in a letter to the Securities and Exchange Board of India (SEBI) do not represent any finding by the market regulator or tax authority.
The company’s response came after reports had been made that proxy advisory firm InGovern had approached SEBI to investigate Meesho’s GST treatment and the potential implications of its tax position for investors.
According to an ET Now report, the representation raised concerns about disclosure, financial and regulatory risks to the company’s tax treatment. But the details of the representation and whether SEBI has initiated any formal examination or sought information from Meesho remain unclear.
Meesho strongly disputed the allegations in response to NDTV Profit. The company has not received any communication from SEBI or any other regulator regarding the matter, it said.
A company representative said the representation did not reflect any regulatory finding and that Meesho remained confident in its tax positions. It took the strategy based on the legal framework and compliance with disclosure requirements, the company said.
Meesho also questioned the credibility of the material that was attached to the representation. The company said a sample invoice cited in the complaint appeared to be linked to an Amazon employee, whose publicly available professional profile identifies her as working in a finance-related role at Amazon.
This adds to the dispute over the representation and material used to support the concerns raised before the regulator.
InGovern had sought a review of Meesho’s GST treatment, arguing the company’s tax position could potentially have implications for investor disclosures and expose the company to financial or regulatory risks, ET Now reported.
But no public confirmation has emerged that SEBI has opened a formal investigation into Meesho’s GST practices. The market regulator has also not publicly commented on the matter as of now.
The situation shows the increasing scrutiny on big technology and e-commerce companies about tax structures and compliance with regulations and disclosures to investors. With online businesses growing and increasing in size and scale so fast, indirect taxation and its interpretation as tax laws are more important for investors, advisory firms and regulators.
Meesho has maintained that its tax positions are legal and it is compliant with all of the disclosure obligations. The company has also made it clear that it rejects the allegations in the company’s representation.
Whether such a matter will be a matter of regulatory action will be determined by SEBI and will be answered by the company.
Until then, the allegations remain part of a reported representation and have not been established as findings by SEBI or any tax authority.
Comments
Please to leave a comment on this article.