TL;DR
India’s Supreme Court ruled against Tiger Global in a tax dispute tied to its sale of Flipkart shares during Walmart’s 2018 takeover, siding with Indian tax authorities and setting aside a Delhi High Court decision. The judgment limits use of treaty protections for transactions that appear structured to avoid Indian tax and could increase legal and tax uncertainty for foreign investors using offshore vehicles.
What happened
The Indian Supreme Court concluded that Tiger Global could not rely on Mauritius-based entities to claim relief under the India–Mauritius tax treaty for capital gains linked to its 2018 exit from Flipkart during Walmart’s acquisition. The bench overturned a 2024 Delhi High Court ruling that had overturned a 2020 Authority for Advance Rulings (AAR) order, which found Tiger Global was prima facie avoiding tax and therefore ineligible for treaty protection. Tiger had sought a certificate to prevent tax withholding, arguing gains were exempt under a grandfathering provision because the shares were acquired before April 1, 2017. Indian tax authorities rejected that request in 2020, questioning the offshore structure. The Supreme Court framed the dispute as a matter of sovereign taxing power and warned against arrangements that dilute that power. Tiger Global did not respond to requests for comment. The firm may seek a review of the verdict, though such petitions are rarely successful.
Why it matters
- Reinforces Indian authorities’ ability to scrutinize and challenge cross-border treaty-routing structures used to reduce tax liabilities.
- May increase tax and legal uncertainty for global funds that use offshore jurisdictions to manage exits from Indian investments.
- Signals a judicial preference for assessing the economic substance of transactions over their formal legal structure, per tax commentators.
- Could influence how future cross-border deals into and out of India are structured, priced and underwritten.
Key facts
- India’s Supreme Court ruled against Tiger Global in the tax dispute tied to its Flipkart exit.
- The decision set aside a 2024 Delhi High Court judgment that had favoured Tiger Global.
- A 2020 Authority for Advance Rulings order had found Tiger Global was, prima facie, avoiding tax and denied treaty relief.
- Tiger Global first invested in Flipkart in 2009 (initially around $9 million) and increased exposure to roughly $1.2 billion over subsequent rounds.
- Tiger sold its Flipkart stake to Walmart for about $1.4 billion as part of Walmart’s roughly $16 billion deal in 2018.
- Tiger had used entities based in Mauritius and sought a certificate claiming gains were grandfathered from the post-2017 tax regime.
- Indian tax authorities rejected the no-withholding certificate request in 2020, citing concerns about the offshore structure.
- The Supreme Court framed the issue as an assertion of India’s sovereign right to tax income arising in the country.
- Tiger Global did not provide a comment in response to requests following the ruling.
- The firm can ask the court to review the verdict, although the source notes such petitions are seldom successful.
What to watch next
- Whether Tiger Global files a review petition against the Supreme Court decision (the source says the firm can seek a review, though such petitions are rarely successful).
- Possible changes in how private funds and multinationals structure investments into India or use treaty jurisdictions for exits: not confirmed in the source.
- Whether Indian tax authorities apply the reasoning in this judgment to other treaty-routing cases and advance-ruling requests: not confirmed in the source.
Quick glossary
- Treaty-routing: Using an entity in a third country to route a cross-border transaction in order to obtain favourable tax treatment under that country’s tax agreements.
- Authority for Advance Rulings (AAR): An administrative mechanism some countries provide that allows taxpayers to obtain binding or advisory rulings from tax authorities on the tax treatment of proposed transactions.
- Grandfathering clause: A provision that exempts certain earlier investments or transactions from a newer tax rule, preserving prior treatment for qualifying items.
- Capital gains tax: A tax on the profit realized from the sale of a capital asset, such as shares, property or a business stake.
Reader FAQ
Did Tiger Global lose the case?
Yes. The Indian Supreme Court ruled against Tiger Global and backed tax authorities in the dispute.
Can Tiger Global appeal the ruling?
The firm can seek a review of the verdict, though the source says such review petitions are rarely successful.
Will this decision change the India–Mauritius tax treaty?
Not confirmed in the source.
Did Tiger Global pay the disputed tax following the ruling?
Not confirmed in the source.
India’s top court has ruled against Tiger Global in a tax case stemming from its Flipkart exit during Walmart’s 2018 takeover, a decision that strengthens New Delhi’s ability to challenge…
Sources
- Tiger Global loses India tax case tied to Walmart-Flipkart deal in blow to offshore playbook
- Supreme Court rules Tiger Global must pay tax on $1.6 …
- SC rejects Tiger's claim; Visa delays strain H-1B holders
- Supreme Court Rules Tiger Global Must Pay Capital Gains …
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