What was the Supreme Court's ruling regarding Tiger Global and Flipkart?

The Supreme Court ruled that tax benefits under the India-Mauritius treaty are unavailable for Tiger Global's 2018 Flipkart exit, making the gains taxable in India.

How much tax might Tiger Global owe after the Supreme Court's decision?

Tiger Global faces a potential tax demand of nearly ₹14,500 crore, with additional interest and penalties possible.

What are the wider implications of the Supreme Court's ruling on foreign investors?

The ruling strengthens the tax department's stance against treaty shopping and could lead to increased scrutiny and tax demands for other foreign funds using similar Mauritius-based investment structures.

Home / Business and Economy / Tiger Global Loses Flipkart Tax Battle

Tiger Global Loses Flipkart Tax Battle

15 Jan

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Summary

Supreme Court rules India-Mauritius tax treaty unavailable for Tiger Global.
Tiger Global faces potential ₹14,500 crore tax demand from Flipkart exit.
Ruling signals stricter scrutiny on foreign investment tax structures.

In a significant ruling, the Supreme Court has denied tax benefits to global investor Tiger Global concerning its 2018 exit from Flipkart. The apex court determined that the India-Mauritius Double Taxation Avoidance Agreement (DTAA) does not apply to the transaction, potentially leading to a tax demand of approximately ₹14,500 crore against the firm. This judgment overturns earlier relief granted to Tiger Global by the Delhi High Court.

The Supreme Court concluded that Tiger Global's use of the Mauritius route for its Flipkart stake sale to Walmart constituted "treaty shopping" and tax avoidance. The court asserted India's sovereign right to tax income within its borders, underscoring the importance of protecting domestic tax revenues. This decision provides substantial judicial backing for the Income Tax department in challenging similar tax planning structures.