Summary
An Indian Supreme Court ruling now requires Tiger Global to pay taxes in India on its 2018 sale of Flipkart shares to Walmart, overturning a previous court decision. The judgment could impact how foreign investors navigate tax treaties when exiting investments in India. It allows authorities to scrutinize offshore investment structures and possibly deny treaty benefits if they appear to lack genuine business activities.
Key Facts
- India's Supreme Court ruled Tiger Global must pay tax on its Flipkart sale to Walmart.
- The 2024 ruling overturned a previous decision that allowed tax relief under the India–Mauritius treaty.
- The court can now deny treaty benefits if it finds offshore structures to have little real business activity.
- The decision could impact how foreign investors manage exits from Indian ventures.
- Tax authorities can scrutinize any offshore deals that seem to avoid taxes.
- Experts say the ruling might worry foreign investors due to potential scrutiny of past transactions.
- Tiger Global used Mauritius-based entities for the 2018 Flipkart transaction, claiming exemption based on pre-existing tax treaties.
- The Supreme Court holds that being incorporated in Mauritius alone does not guarantee tax treaty benefits.
