CA Aishwariya K Rajagopal
Why the Tiger Global case matters?
The Tiger Global case has become important not just because of the amount involved, but because of the principle it reinforces.
In 2018, Tiger Global sold its stake in Flipkart and claimed capital gains tax exemption under the India-Mauritius tax treaty, relying on a Tax Residency Certificate (TRC).
For a long time, the general understanding was simple: if a valid TRC was available, treaty benefits would apply and the tax department could not question the structure further.
The Supreme Court has now clarified that this understanding is incomplete.
While a TRC is mandatory, it does not stop the tax authorities from examining the transaction in depth. They are entitled to look at where real control lies, who takes key investment decisions, whether the structure has genuine business substance, and whether it was created mainly to avoid tax.
Based on this, the tax department has been allowed to complete Tiger Global's assessment for AY 2018-19 and review the capital gains from the Flipkart sale.
This is why investors are paying close attention. Many foreign investments into India were routed through Mauritius or Singapore based on earlier comfort around treaty benefits. The ruling shows that even past transactions can face scrutiny if substance is weak.
This does not mean that all old cases will be reopened. However, it does introduce greater uncertainty, especially for large exits and cases involving pending refunds.
The simple takeaway: treaty benefits depend not just on documents, but on real business substance and intent.
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