Overview
- Justices JB Pardiwala and R. Mahadevan set aside the August 2024 Delhi High Court ruling, restoring the tax department’s position on the 2018 Walmart–Flipkart deal.
- The court denied protection under the India–Mauritius treaty, holding that Tax Residency Certificates are not conclusive where conduit use is alleged and emphasizing substance over form.
- The judgment narrows the effect of pre‑2017 grandfathering by holding that GAAR can apply if a tax benefit is obtained through an impermissible arrangement after April 1, 2017.
- Reported tax demands are in the range of roughly Rs 14,500–15,000 crore, with detailed orders and final quantification of liability awaited.
- Tax experts say the decision strengthens India’s hand to challenge offshore structures, prompting foreign investors to reassess holding and exit strategies, though Tiger Global may still seek review.