Why is it in the news?
→ Supreme Court ruled Tiger Global’s USD 1.6 billion Flipkart stake sale taxable in India.
→ DTAA benefits under India–Mauritius treaty denied using GAAR.
Category
Economy
Important Points
- Tiger Global sold its Flipkart stake to Walmart in 2018 for USD 1.6 billion.
- The Supreme Court overturned Aug 2024 Delhi HC judgment.
- Restored AAR 2020 order denying DTAA benefits.
- Held DTAA benefits cannot rely solely on Tax Residency Certificate.
- India–Mauritius DTAA applies only when assets directly owned by Mauritian entity.
- SC emphasised economic substance, control and management.
- Grandfathering applied to investments before 1 April 2017.
- GAAR implemented from 1 April 2017 to curb treaty shopping.
- India has over 90 DTAAs.
- Startup funding declined to USD 10.5 billion in 2025, down 17% from 2024.