Supreme Court rules against Tiger Global in Walmart-Flipkart deal tax case

The Supreme Court of India made a decision against Tiger Global in the Walmart and Flipkart tax case. This is an important decision about taxes on money made from selling things in another country. The India Supreme Court decision is important because it is not about one investor or one time someone sold something. It is about the way people use rules from other countries, like Mauritius to pay less taxes or no taxes at all on the money they make from things they own in India. The Walmart and Flipkart tax case is a deal because it affects the way people invest in India and how they pay taxes on the money they make from India. The Supreme Court of India decision on the Walmart and Flipkart tax case is being talked about a lot because it changes the way people think about taxes, on money made from selling things in India.

1) The deal at the centre of the dispute: Tiger Global’s Flipkart exit (2018)

In the year 2018 Walmart bought most of Flipkart. This was a big deal that said Flipkart was worth about 16 billion dollars. When Walmart took over Flipkart, some people who owned parts of Flipkart sold their parts to Walmart. One of these people was Tiger Global, which was one of the most important companies to support Flipkart. Tiger Global sold its part of Flipkart to Walmart for, about 1.6 billion dollars as many people wrote about during this time.

For Tiger Global, the tax question was straightforward but high-stakes:

Were the capital gains from that sale taxable in India?

Could Tiger say they are protected under the India-Mauritius tax treaty, which has always been good for Tiger when it comes to certain gains? Tiger might be able to use this treaty to their advantage. The treaty has been helpful for Tiger, in the past.

The position of Tiger as reported by Reuters and Indian business and legal media was basically this:

The investment structure used companies that are based in Mauritius.

The company Tiger said that because of the treaty between India and Mauritius Tiger should not have to pay tax on the money Tiger made from this deal. Tiger thought Tiger was eligible for this exemption, from capital gains tax.

The tax people in India did not agree with this. They said that the way people were using Mauritius to pay taxes was not really, about doing business. They said it was a way to avoid paying taxes in India. This is something that people often call “treaty shopping” with India tax and Mauritius tax. India tax authorities think that people are using the Mauritius route to avoid paying India tax.

2) Why Mauritius is so important: the idea of “treaty shopping” and how Indias view on this has changed over time. India has looked at Mauritius in a way because of this thing called “treaty shopping”. Mauritius is central to this issue of “treaty shopping”.

The concept of “treaty shopping” is key here. Mauritius is important because of “treaty shopping”. Indias opinion, on Mauritius and “treaty shopping” has changed. Mauritius and “treaty shopping” are closely linked in Indias view.

Mauritius has been a place for foreign investors who want to invest in India for a very long time. This is because of the tax agreement, between India and Mauritius. To put it simply:

People who invest money can send their investments through Mauritius. If the time is right and things go well investors of Mauritius may have to pay little or no tax in India when they sell their investments and get their money back from India. This is because of the way tax works, on the money they made from selling their investments in India.

India has been making its rules stricter over time. It has been changing the outcomes of treaties to stop people from doing aggressive tax planning. However India still has disputes, around:

Does the investor really have something going on in Mauritius? Is the investor actually based in Mauritius and doing business there? The investor having substance in Mauritius is what matters.

The question is whether the structure was set up mainly to get benefits from a treaty. Was the main reason, for setting up the structure to obtain treaty benefits? The structure was created to get treaty benefits.

We need to think about whether the rules that stop people from avoiding taxes should be more important, than the claims people make because of treaties. The question is whether anti-avoidance rules should override treaty claims. This is a deal because it affects how we deal with anti-avoidance rules and treaty claims.

The Tiger Global case was like a test, for Indias top court. They had to decide how much they would support the tax people when they say that the way something is set up is mainly done to avoid paying tax. The tax people were saying that the way Tiger Global did things was done to avoid paying tax.

3) What the Supreme Court decided, which is the result that everyone is talking about the Supreme Court decision is what matters most. The Supreme Court made a decision. This decision is the key outcome that people are focusing on.

On January 15 2026 Indias Supreme Court made a decision against Tiger Global. This decision means that Indian tax authorities can now consider the money Tiger Global made from selling its Flipkart stake to Walmart as taxable in India. Tiger Global tried to avoid paying taxes on this money by using a treaty but the Supreme Court said no to Tiger Global. The Supreme Court ruled that Tiger Global has to pay taxes on the gains, from the Flipkart stake sale to Walmart in India.

The Court made some strong statements about this situation. They said the way things were set up was clearly done to avoid paying taxes. The Court also said that when people try to avoid paying taxes they should not be able to take advantage of benefits that are meant to help people who are following the rules. This means that the authorities can stop people from getting these benefits if they think someone is trying to avoid paying taxes. The Courts decision is about tax avoidance. It is, about people claiming treaty benefits when they are not supposed to.

There is something to consider: some news reports say that we are still waiting for a detailed decision. This means we do not have the explanation and legal thinking yet. We will understand the decision and the legal rules that were used to make it when we can read the entire document.

The Supreme Court is taking a direction. This direction is clear when we look at reports from the same day. The Supreme Court has said it will take an approach when it comes to tax disputes about Indian assets that are based on treaties. The Supreme Court will focus on the substance of these tax disputes. The tax disputes are, about assets and are based on treaties.

4) The legal path: from tax authorities to High Court to Supreme Court

a) The tax department is questioning the claim that is made under the treaty. The tax department thinks that the treaty claim is not correct. The tax department wants to review the treaty claim. The treaty claim is being challenged by the tax department.

The Indian authorities said that Tiger used companies in Mauritius to avoid paying taxes. They also said that Tiger should not get the protection that comes with a treaty in the way that Tiger was claiming it. The Indian authorities thought that Tigers companies, in Mauritius were a way for Tiger to get out of paying taxes.

b) Earlier relief for Tiger (Delhi High Court)

Before the Supreme Court made its decision Tiger Global got help, from the Delhi High Court. The Delhi High Court agreed with what Tiger Global wanted which was to be exempt or get some relief like it said in a lot of reports.

The Supreme Court has made a decision to overturn that relief that was given. This means the Supreme Court is changing what was decided before. The decision made by the Supreme Court is about the relief and now the earlier relief from the Supreme Court is not going to be, in effect anymore. The Supreme Court overturns that relief that people were getting.

The Supreme Court made a change to what they said before and they decided that the tax department was right. That is why people are talking about this decision and saying it is a big deal and not good for Tiger. The decision is very important. People are calling it a landmark, which means it is a major setback, for Tiger.

5) What were the real legal issues under the hood?

When you cut through all the language the argument usually boils down to a few main questions that always seem to come up in tax fights, between countries:

Issue 1: Can India look beyond all the paperwork. Actually think about the real purpose of Indias rules and regulations which is to help India make things easier, for the people of India instead of just doing a lot of paperwork for India?

The Tiger structure may have done everything that was required by the rules like getting the residency documents but India said the court should look at whether the structure was really doing business or if it was just set up to get a tax benefit. India thought the court should check if the Tiger structure was actually making money or if it was just made to save on taxes. The main question was whether the Tiger structure had any commercial purpose or if it was just created to get a tax advantage.

The Supreme Court made a decision. People are talking about it a lot. They think this decision is giving tax authorities and courts the power to look closely at what people are trying to do not just if they are following the rules. The Supreme Court decision is, about looking at the intent and substance of things not just if everything looks okay on the surface. This means the Supreme Court decision is helping tax authorities and courts to understand what is really going on.

Issue 2: Treaty protection vs anti-avoidance rules

There is a problem that keeps happening all around the world. Tax treaties are supposed to help people and companies avoid paying taxes and make things clear.. At the same time countries also want to make sure that people do not take advantage of these tax treaties in a bad way. Tax treaties are really important for tax treaties to work properly. The main goal of tax treaties is to prevent taxation and provide certainty for tax treaties.

Indias position was that people used the treaty route in a way that was not fair. They did this to avoid paying what they should. So India said that these people should not get any benefits from the treaty. The treaty route was being used in the way that is why Indias position was that the benefits should be denied to them. Indias position, on this matter was very clear the treaty route was used for avoidance. That is not right.

Issue 3: “Grandfathering” and timing effects

The law says something about the money people invested before some important rules were put in place. This is sometimes called “grandfathering” which means older investments are protected.. The Supreme Court made a decision that went against the people who made these investments. They said that just because someone invested their money at a time it does not mean they are safe from trouble if what they did was not fair. The Supreme Court sided with the people who collect taxes. This means that investments made before key policy cutoffs, like these older investments are not automatically protected. The Supreme Court is saying that timing is not the thing that matters and investments made before key policy cutoffs or these older investments can still be a problem if they are seen as bad.

Issue 4: The role of advance ruling processes

The legal coverage shows that the case is also about how Indias advance ruling mechanism handled Tigers applications. It is, about whether the authorities were right to say no to them. In words the case is not just about if it is taxable but also if the process was correct when it did not give Tiger the help they asked for at the beginning. The case is looking at how Indias advance ruling mechanism treated Tigers applications and if the authorities did the thing when they rejected them.

6) Why this ruling is a big deal (even beyond Tiger and Flipkart)

a) It sends a message to funds that they use offshore holding structures to do business. Global funds are the ones that get this message. The message is, about the holding structures that global funds use.

People who invest money in countries like those who put money into new Indian companies usually do business in places outside of India. This decision means that if India thinks the reason for doing business this way is mainly to avoid paying taxes and not for any business reason then India will not honor the tax agreements it has, with other countries when it comes to these investments. India does this when it believes the structure of the business is mainly set up to avoid taxes and does not really do business.

b) This thing could really change how people plan their exits in venture capital and private equity. Venture capital and private equity are going to be affected by this. People who work in venture capital and private equity will have to think about exits in a new way. This will make a difference, in venture capital and private equity.

The startup scene in India is about giving early investors a way out when they want it. If the tax situation gets really unclear for people using agreements, between countries investment funds may:

People should think again about where they have their companies set up. They need to reconsider where these companies are based. The location of these companies is very important. People should think about where they have their companies and maybe change the location of the holding entities.

invest more heavily in “substance” (real decision-making, employees, offices),

or price in potential tax costs in deal negotiations.

C) The company may have to deal with lawsuits and make sure they are doing everything correctly which could be a lot of extra work, for a little while especially when it comes to litigation and compliance work. This is something that the company will have to consider when thinking about litigation and compliance work.

A stricter standard often means having high expectations for something. This usually happens when people want the results, from the things they do or the things they are involved in. A stricter standard often means that people have to work hard to meet those expectations.

more scrutiny,

more documentation,

There are disputes where taxpayers and the authorities do not see eye to eye on the purpose of something and what it really means. Taxpayers and the authorities have opinions, on the purpose and the substance of things.

7) What this means for Walmart and Flipkart. What it does not mean for Walmart and Flipkart

It is easy to think that Walmart is in trouble because of the Walmart-Flipkart deal.. When you read about it the problem is really about Tiger Global having to pay taxes on the money they made from selling their shares. This is not about Walmart having to pay taxes for buying the shares. The issue is, about the tax that Tiger Global has to pay on their gains from the sale not about Walmart paying taxes on the purchase.

So big mergers and acquisitions, like the ones that happen between companies can be affected in indirect ways because:

Buyers want the seller to be certain about everything. They like it when they can exit a deal cleanly without any problems. They also do not want to have to worry about paying much tax later on. Buyers want seller certainty, which means exits and no tax overhang for the seller. This is what buyers are looking for when they make a deal, with a seller.

The thing, about taxes is that there is always a risk that the government will come back later and ask for money. This can make things really complicated when you are trying to figure out warranties and indemnities and all that. It also affects how people negotiate with each other. Taxes can really mess up the negotiation process. When you are talking about warranties and indemnities taxes are something that you have to think about.

8) How the situation with tax disputes fits into the picture of Indias history of dealing with big name tax disputes. The thing about Indias history of high-profile tax disputes is that it has been an complicated one. India has had to deal with a lot of high-profile tax disputes over the years. These high-profile tax disputes have been an issue, for India.

India has had a lot of tax problems with companies from other countries. People who invest money around the world keep a close eye on India tax disputes because they want to know if the rules are going to stay the same. This is important for India tax rules and the tax system, in India.

Reuters has put the Tiger matter with big tax disputes that involve other countries. This shows that the decision, on the Tiger matter is really important when we talk about how people think about investing in general. The Tiger matter is a deal because it affects how people see the whole investment situation.

What is different, about the Tiger case is that it lands squarely in the era of the Tiger case. The Tiger case is an one because it happens in the modern era of the Tiger case. The thing that really stands out about the Tiger case is that it is part of the era of the Tiger case.

tighter anti-avoidance norms,

more assertive scrutiny of treaty shopping,

India needs a policy that protects the tax base. This policy should still attract investment to India. The goal is to have a balance, between protecting the Indian tax base and getting people to invest in India.

9) Now that we know what is going on let us think about what foreign investors may do in this situation. Foreign investors will probably try to figure out what to do with their money. The thing that foreign investors need to do is to make decisions about their investments. Foreign investors have to be careful and think about what they want to achieve with their investments. What foreign investors may do next is try to find places to put their money. Foreign investors may also try to work with people to make good investment decisions. The main thing for investors is to make sure they are doing what is best, for their investments.

When these kinds of decisions are made they usually affect what happens in the market. So investors and advisors may do a things. They will probably react in ways to these rulings. Investors and advisors will likely think about what the rulings mean for the market and, for them. Investors and advisors may change what they do because of these rulings.

Substance-building in treaty jurisdictions

More real operations: local directors with actual authority, employees, office presence, decision-making minutes and governance trails.

The main goal is to show that the entity is real and it exists for business reasons not for tax purposes. We need to make it clear that the entity is actually doing business. It is not just something that was created to save on taxes. The entity exists for business reasons. That is what we want to demonstrate.

Shift away from legacy treaty routes

Some funds may look at places or ways of doing things that are allowed by law. These places or ways have to be clear and straightforward. They also have to match what India is currently thinking about avoiding tax loopholes. Some funds will do this to get certainty and be, on the page as Indias rules to prevent people from avoiding taxes.

Greater use of onshore or more transparent structures

Particularly for new funds raising capital and investing in India with long time horizons.

Deal pricing changes

When investors think about an exit they consider that it might mean they have to pay more in taxes. So they take this risk into account when they think about how much something’s worth. They factor the tax cost into what they expect to get from the investment. This means that the potential exit and the tax cost that comes with it can affect how investors value something.

10) What to watch next because the story of the show is not fully yet and you want to know what happens to the characters, in the story of the show.

So the Supreme Court makes a decision. That is not the end of it. There are still things that need to happen after that things that affect people in their lives the next steps, in the process these next steps they really matter.

The detailed judgment text is important. If some parts are still awaited, as some people are saying then the small details will be very important. This is especially true, for the tests that the Court uses to figure out if someone is misusing a treaty or trying to avoid it. The Court uses these tests for treaty abuse and avoidance analysis. The fine print will really matter for treaty abuse and avoidance analysis.

So the big question is how the tax people will use this ruling. Will they only use it for situations that’re really similar or will they use it for a lot of different situations and really look closely at all the deals that involve treaties? The tax authorities have to decide if they will apply the ruling in a way, which means they will only use it for tax situations that are almost exactly the same or if they will apply the ruling more broadly which means they will use it to look really closely at a lot of tax deals that involve treaties and see if they are okay. This is important because it will affect how the tax authorities look at tax deals that involve treaties and that is what people are worried, about when they talk about the ruling and tax authorities and treaties.

The decision will have an impact, on pending cases. Other disputes that involve structures may use this decision as an example to support their case. This means that the outcome of these structures cases may be affected by this decision. Offshore structures will likely be watching this closely to see how it affects them.

People who invest will have thoughts, about this. Some people will think it is a thing because they can understand what is going on. Investor sentiment is important here. Other people will think it is a thing because they will see more risk. Investor sentiment will be affected by this. It really depends on how consistent the rulesre if people can see what is happening. If enforcement is consistent and transparent then investor sentiment will be better.

11) The bigger takeaway in one line

The Supreme Court has signalled that treaty paperwork alone may not protect foreign investors if the structure looks like a tax-avoidance arrangement—and India can deny treaty benefits where it believes “substance” and intent don’t match the claimed exemption