Moneycontrol
Last Updated : Jul 13, 2018 05:34 PM IST | Source: Moneycontrol.com

Tax obligations in Flipkart acquisition will be fulfilled, Walmart tells I-T dept

The department has been closely monitoring the deal and had intimated Walmart even before official announcement of the deal

Moneycontrol News @moneycontrolcom

Walmart has assured the Indian tax department that it will fulfill all tax obligations towards the Indian government following its $16 billion acquisition of e-commerce major Flipkart.

Tax authorities had earlier written to Walmart about tax provisions on indirect transfers in the country and it could ask the department for any clarifications on the matter.

Under Section 195 of the I-T Act, anyone making payment to non-residents is required to deduct tax (commonly known as withholding tax).

"Walmart has replied to the letter saying they will fulfill all tax obligations," an official has said, according to PTI. However, the US company has not yet approached the I-T department for consultation with regard to computation of tax liability, the official added.

The department has been closely monitoring the deal and had intimated Walmart even before the official announcement of the deal.

The report quoted an official saying Walmart will seek to fulfill any regulatory requirements. Flipkart had earlier spoken to the tax authorities in Bengaluru.

The department has been studying Section 9 (1) of the income tax law, which deals with indirect transfer provisions, to see if the benefits under the bilateral tax treaties with countries like Singapore and Mauritius, could be available for foreign investors selling stakes to Walmart.

According to experts, the only regulatory clearance that the deal would need is from the Competition Commission of India (CCI).

Walmart had in May approached fair trade regulator CCI for approval of its proposed acquisition of a majority stake in e-commerce major Flipkart, saying the deal doesn't raise any competition concerns.

(With inputs from PTI)
First Published on Jul 13, 2018 02:35 pm
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