To ascertain the exact tax liability, the revenue department will write to Flipkart seeking the share purchase agreement that the company had entered into with Walmart. “The department will seek the share purchase agreement once the formalities for the sale are completed. In the Walmart-Flipkart deal, the revenue department will go through the share purchase agreement to ascertain the purpose of investment and the emanating gains. “There is likely to be capital gains withholding tax implications when the shares of Flipkart Singapore are sold by Softbank or other foreign investors. The tax department had last week written to Bentonville, Arkansas-based Walmart saying that the US company can seek guidance about the tax liability under Section 195 (2) of the I-T Act.

Source: Mint May 13, 2018 06:22 UTC