New Delhi: India’s top court has ruled that Tiger Global‘s $1.6 billion stake sale in Indian e-commerce firm Flipkart to Walmart is subject to taxes, handing a win to New Delhi in a landmark ruling that will shape future cross-border deals.
Keenly watched by foreign investors, the dispute relates to how the U.S. investment firm used the India–Mauritius tax treaty to claim tax exemptions and Indian authorities’ fierce objections to it.
The ruling will set a precedent for how India – the world’s most populous nation and a rapidly growing consumer market – applies tax principles and interprets international tax treaties.
Tiger Global had been locked in a legal tussle with Indian tax authorities over the 2018 stake sale by its Mauritius-based entities to Walmart. That transaction was part of U.S. retail giant Walmart‘s $16 billion acquisition of Flipkart.
JUDGE CALLS DEAL ‘IMPERMISSIBLE TAX AVOIDANCE’
Supreme Court Judge R. Mahadevan said Tiger Global‘s transaction was designed as an “impermissible tax avoidance arrangement”. It, therefore, cannot claim an exemption from paying tax on the profit from the stake sale, he added.
The exact amount of tax and penalties Tiger Global now owes, which would depend on how much profit it made from the deal, was not immediately clear.
Tiger Global did not immediately respond to a request for comment on the ruling. The company can ask the Supreme Court to review its verdict, but typically such requests have a low success rate.
“The decision marks a watershed moment in Indian taxation paradigm,” said Tarun Jain, a lawyer specializing in taxation at the Supreme Court.
It will put “the onus upon the taxpayers to demonstrably engage only in genuine and bona fide deals, which are not motivated by tax considerations,” he said.
TIGER GLOBAL CLAIMED TAX EXEMPTION UNDER TREATY
“This is a judgment which is now watched today all over the world, not just domestically,” N. Venkataraman, the Indian government’s top lawyer, said in court following the decision.
Tiger Global had argued that profits from the stake it sold – 17% of Flipkart, according to local media reports – were exempted from taxes under the India-Mauritius tax treaty.
Indian tax authorities, however, said Tiger Global‘s Mauritius units served merely as a conduit for the U.S. parent company, and it had improperly used the treaty to avoid paying tax. Tiger Global denied that.
The Supreme Court had been hearing the case since January 2025 as Indian tax authorities challenged a previous Delhi High Court ruling in favour of Tiger Global that found no wrongdoing.
The top court overturned that decision on Thursday, saying “taxing an income arising out of its own country is an inherent sovereign right of that country.”
Walmart competes with Amazon in India’s thriving e-commerce market, where online shopping has boomed in recent years. Walmart has not previously commented on the matter.
(Editing by Muralikumar Anantharaman, Tomasz Janowski and Joe Bavier)
Disclaimer: This report is auto generated from the Reuters news service. ThePrint holds no responsibility for its content.
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