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Supreme Court rules that Tiger Global’s Flipkart sales proceeds are taxable
- IBJ Bureau
- Jan 16, 2026
The Supreme Court has ruled that Tiger Global’s $1.6-billion stake sale in e-commerce company Flipkart to Walmart is subject to taxes. The verdict hands a big advantage to New Delhi in a landmark ruling that will shape future cross-border deals.
Keenly watched by foreign investors, the dispute relates to how the US investment firm used the India-Mauritius tax treaty to claim tax exemptions and Indian authorities’ fierce objections to it.
The ruling will set a precedent for how India applies tax principles and interprets international tax treaties.
In this instant case, three Tiger Global entities based in Mauritius had sold shares in Singapore-based Flipkart – which had owned assets in India, including Flipkart India – to Walmart in 2018.
Since then, the hedge fund has been locked in a legal tussle with Indian tax authorities for the transaction, which was a part of Walmart’s $16-billion acquisition of Flipkart.
“In the case at hand, there is clear and convincing prima facie evidence to demonstrate that the arrangement was designed with the sole intent of evading tax, and the assessees have failed to furnish sufficient material to rebut this presumption,” Justice J B Pardiwala and R Mahadevan have written in the judgment.
The exact amount of tax and penalties that Tiger Global now owes, which would depend on how much profit it made from the deal, is not immediately clear.
“The decision marks a watershed moment in the Indian taxation paradigm,” notes Tarun Jain, a lawyer specialising in taxation.
“It will put the onus upon the taxpayers to demonstrably engage only in genuine and bona fide deals, which are not motivated by tax considerations,” he adds.
Tiger Global had argued that profits from the stake it sold – 17 per cent of Flipkart – were exempted from taxes under the India-Mauritius tax treaty. Indian tax authorities, however, had said that Tiger Global’s Mauritius units had merely served as a conduit for the US parent, and it had improperly used the treaty to avoid paying tax. The Supreme Court has been hearing the case since January 2025, as Indian tax authorities had challenged a previous Delhi High Court ruling in favour of Tiger Global that had found no wrongdoing.
The top court has overturned that decision, pointing that mere possession of the tax residency certificate of Mauritius, which the Tiger Global entities had, is not sufficient. “In the present case, the respondents seek exemption from the Indian Income tax, while, at the same time, contending that the transaction is also exempt under Mauritian law, which runs contrary to the spirit of the DTAA and presents a strong case for Indian authorities to deny the benefit as such an arrangement is impermissible,” the bench has written in the judgment.
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