Following the Supreme Court’s ruling against Tiger Global in the capital gains tax case pertaining to the investor’s stake sale in Flipkart, Startup Policy Forum (SPF) has called on the Centre to adopt a balanced and broader interpretation of tax treaties and reassure investors. The SPF, which represents over 60 startups like Ather Energy, CRED, Razorpay, among others, wrote to the finance ministry saying that while the SC ruling is legally grounded in the specific facts of the case, it risks sending mixed signals to foreign investors and may have longer-term implications for India’s startup ecosystem, which has been a significant beneficiary of foreign capital. The development was first reported by Reuters. For context, the apex court said last week that Tiger Global was liable to pay tax in India on its $1.6 Bn sale of Flipkart shares to Walmart in 2018 via its Mauritius entity. The US-based investment firm had used Mauritius-based holding companies to benefit from India-Mauritius Double Taxation Avoidance Agreement (DTAA), as per which capital gains arising from the sale of shares of Indian companies were historically exempt from tax in India. However, the SC sided with the Indian tax authorities which argued that Mauritius-based entities were… Read MoreInc42 Media
