OnePlus is facing a tax demand linked to its lifetime warranty programme that offers free screen replacements for smartphones affected by the widely reported “green line” display issue, even as the company recorded a decline in both revenue and profit in 2024-25, The Economic Times reported.
In regulatory filings submitted to the Registrar of Companies, OnePlus Technology India disclosed that goods and services tax (GST) authorities have carried out inquiries, searches and inspections into its “Green Line Worry Free Solution” for FY24 and FY25, the report said. The scheme provides free display replacements for devices impacted by the green line problem, a glitch that has affected several Android smartphones globally since 2022-23, particularly those using AMOLED displays, often after software updates.
GST officials have raised a tax demand of Rs 93 crore in relation to the warranty programme. OnePlus has deposited Rs 10 crore under protest while contesting the claim, The Economic Times reported. In its filing, the company said it has been advised by senior legal counsel that it has a strong case and that the likelihood of any liability arising is low. As a result, it has not made any provisions for the demand. The filing, however, does not specify the grounds on which the tax claim has been raised.
A OnePlus India spokesperson said the company is engaging with the authorities on the matter and remains confident of a favourable resolution, while continuing to prioritise customer experience. The spokesperson also noted that OnePlus is the only smartphone brand offering a lifetime display warranty for the green line issue, with the policy applicable to all devices sold through authorised channels, The Economic Times said.
The tax issue comes amid a sharp drop in the company’s financial performance. For FY25, OnePlus India reported a 13 per cent year-on-year decline in revenue to Rs 12,983 crore, while net profit fell sharply to Rs 16 crore from Rs 230 crore in the previous year, the report said. The company did not cite specific reasons for the decline in its RoC filing. However, the spokesperson told The Economic Times that the performance reflected a strategic shift involving investments in systems, compliance and infrastructure aimed at supporting long-term growth.
The filings also revealed that auditors made adverse remarks on the company’s internal financial controls and questioned whether such controls were operating effectively as of March 2025. Responding to this, the spokesperson said OnePlus has already implemented corrective measures to address the auditors’ observations, the report added.
Experts quoted by The Economic Times pointed to a possible regulatory disconnect. An industry expert, said the auditors had disclaimed an opinion on internal controls, citing the absence of adequate audit trails, while the company had made no provisioning for the GST demand. This, he said, raises concerns around governance oversight, particularly in light of a mid-year ERP migration that auditors noted was still in the process of establishing appropriate controls as of March 2025.
Separately, OnePlus disclosed that it has received several other show-cause and scrutiny notices from GST authorities, involving an aggregate demand of nearly Rs 280 crore. Against these claims, the company has submitted its responses and deposited Rs 1.85 crore under protest, The Economic Times reported.
