The Supreme Court stopped the Supreme Court ruling in Delhi in the Tiger Global case

On Friday, the Supreme Court suspended the Supreme Court in Delhi for the Tiger Global Special Stock Company regarding the implementation of the agreement to avoid double taxation between India and Morrichus over capital gains from selling Flipkart shares to Walmart. Experts believe that the ruling may lead to a state of uncertainty for foreign investors.

The order issued by the body of a section of Judges JB Bardiola and Rahavan indicated that this issue has effects on all of India and requires a “extensive study.”

In its ruling, the Supreme Court suspended the Delhi Supreme Court Order, which granted tax advantages under the DTAA agreement between India and Mauritius of Tiger Global. Before that, the Aar Rulings refused to obtain the advantages of Tiger Global in relation to the deal.

The case relates to Tiger Global, which holds a global trade license of the first category and a tax residence certificate from Mauritius, and has acquired shares in the Singapore Folipkar Company between 2011 and 2015. The company had significant investments in Indian entities. In 2018, Tiger Global sold its shares in the company, which led to capital gains. Grandfather’s item provides according to the DTAA agreement between India and Mauritius on investments and exemption from capital profit tax in India for shares acquired before April 1, 2017.

Tax experts indicated that many effects can arise from the Supreme Court ruling.

And Abhishek said a. Rastouji, founder of the Rastouji room, and the tax and constitutional expert, that the endowment would cause ambiguity regarding the possibility of applying DTAA’s advantages, especially for the investments that are directed via Mauritius. This may affect investor confidence and affect decisions related to the structure of investment in India. He also said: “The government’s position on tax treaties and the interpretation of its provisions can be subject to scrutiny, which may lead to a review of policies or amendments to prevent misuse of the treaty while maintaining India’s attractiveness to foreign investors.”

Rakish Nangia, the administrative partner of Nangia & Co, said that the freezing of the Supreme Court raises a question mark on the ruling of the Delhi Supreme Court, and it appears that the theater is prepared for a fierce tour of the discussion on the procedures that will be approved to prevent the abuse of the potential treaty.

In its ruling issued last year, the Delhi Supreme Court supported the sake of taxpayers that the provisions contained in the Tax Treaty between India and Singapore were self -sufficient to address potential allegations related to the misuse of the treaty, and therefore, “… … it will be not allowed for revenues to manufacture Extra barriers or criteria that the parties must fulfill in order to benefit from the advantages of DTAA, …

Akm Global said that there are many major areas that may need comprehensive attention from the interpretation of tax treaties in indirect transportation cases, clarity on what constitutes a channel company and what is the economic essence as well as how important the people are present. In this entity to prove the essence, given that investment entities do not necessarily need employees working there in that judicial state. He pointed out that “these issues require a clear and consistent approach followed by the authorities, and the judgment will be awaited and welcomed in this regard.”