Tiger Global ruling creates doubt for foreign investors: Experts

EXPERTS HAVE DESCRIBED the Supreme Court's ruling in the Tiger Global-Flipkart capital gains dispute as a pivotal shift in India's approach to international tax treaties, potentially reshaping foreign investment structures, increasing litigation, and introducing greater uncertainty for overseas investors.

- KULDEEP SINGH

The apex court, in a bench led by Justices JB Pardiwala and R Mahadevan, held that capital gains from Tiger Global's stake sale in Flipkart to Walmart in 2018 are taxable in India. The judgement reinforces India's sovereign right to tax income generated within its borders and states that treaty benefits under the India-Mauritius Double Taxation Avoidance Agreement (DTAA) cannot be claimed mechanically when facts point to abuse. Tax

experts opined that the judgment is also likely to have an overriding effect on investments which were grandfathered through India-Mauritius treaty and the same may be questioned on the economic reality.