Supreme Court rules against Tiger Global in 2018 Walmart deal tax case

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• India's Supreme Court: Flipkart stake sale to Walmart by Tiger Global is taxable
• Ruling sets precedent for future cross-border deals and tax treaty use
• Tiger Global's use of Mauritius units deemed impermissible tax avoidance

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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 on companies' use of international tax treaties.

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 New Delhi's fierce objections to it.

The ruling will set a precedent for how India applies tax principles in future cross-border deals.

Tiger Global had been locked in a legal tussle with Indian tax authorities over the 2018 stake sale, a deal that was part of U.S. retail giant Walmart's $16 billion acquisition of Flipkart.

Tiger Global did not immediately respond to a request for comment on the ruling.

DEAL AN 'IMPERMISSIBLE TAX AVOIDANCE ARRANGEMENT'

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.

"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.

The stake sold - 17% according to local media reports - was at the time held by Tiger Global's units in Mauritius. And the investment firm argued the India-Mauritius tax treaty exempted it from paying tax on its profits from the transaction.

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 has said that description of its subsidiaries is incorrect.

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.

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.