Published Tue, 20 Jan 2026 | Updated Tue, 20 Jan 2026 International taxation
1️⃣ Background
Mauritius-based Tiger Global entities sold their Flipkart Singapore shares in 2018 (Walmart deal) and claimed capital gains exemption under the India–Mauritius tax treaty. AAR rejected their applications, but the Delhi High Court reversed that decision.
2️⃣ Core Issue
Are these capital gains taxable in India?
Was the Mauritius structure genuine, or a prima facie tax avoidance arrangement?
Does the DTAA + TRC protect them after the 2012 (GAAR) and 2016 (DTAA) changes?
3️⃣ Supreme Court’s Key Findings
✔ Indirect transfer rules (Sec 9(1)(i)) apply – Because Flipkart Singapore’s value came mainly from India.
✔ TRC = necessary but NOT sufficient – Post‑amendments, authorities can look beyond it.
✔ Real control was in the USA, not Mauritius → Companies lacked commercial substance.
✔ Article 13 exemption doesn’t apply – They sold shares of a Singapore company, not an Indian one.
✔ GAAR applies, because the tax benefit arose after 1 Apr 2017, even though investments were earlier.
✔ Structure was designed primarily to avoid tax; hence, no treaty protection.
4️⃣ Final Outcome
⚠️ Supreme Court set aside the Delhi HC decision.
⚠️ Capital gains are taxable in India.
⚠️ AAR rightly rejected the applications as prima facie tax‑avoidance arrangements.
5️⃣ Link to Azadi Bachao Andolan
🔹 Azadi held TRC is enough — but that was before GAAR/LOB amendments.
🔹 SC clarified: Today, TRC alone can’t shield abusive structures.
🔹 Azadi applies only in the older, pre‑GAAR regime.
