Quick Summary
In the aftermath of the Supreme Court's ruling in favour of the Income Tax Department in the high-profile Tiger Global case, the Central Board of Direct Taxes (CBDT) has sought to calm investor concerns by clearly stating thatold cases will not be reopened. Responding to querieson whether the verdict could trigger reassessment of past transactions routed through jurisdictions such as Mauritius or Singapore, senior CBDT sources categorically said, "No, it would not." The clarification comes amid
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FAQ :
No, the CBDT has clarified that past tax cases will not be reopened as a result of the Supreme Court's ruling in the Tiger Global case.
The Supreme Court ruled that capital gains from the sale of a $1.6 billion stake were taxable in India, overturning a previous Delhi High Court judgment. The court found the transaction to be an impermissible tax avoidance arrangement.
The Supreme Court held that GAAR provisions apply to arrangements yielding tax benefits on or after 1 April 2017, irrespective of when the investment was initially made, to curb treaty abuse.
The ruling may prompt foreign investors to reconsider investment structures routed through traditionally tax-friendly jurisdictions. However, the CBDT's assurance aims to maintain investor confidence.
The Supreme Court indicated that merely possessing a Tax Residency Certificate (TRC) does not prevent an enquiry if an interposed entity is used solely for tax avoidance. GAAR can override treaty protection in cases of abuse.
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