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I-T dept examining taxation issues in the $16 bn Walmart-Flipkart deal

As many as 44 shareholders of Flipkart, including significant ones like SoftBank, Naspers, venture fund Accel Partners and eBay, sold their holdings to Walmart

Press Trust of India  |  New Delhi 

Flipkart

The Department is examining the taxation issues with regard to payments made by Walmart Inc to various shareholders of Flipkart following the acquisition of the firm, a senior finance ministry official said Tuesday.

US retailer Walmart purchased 77 per cent stake in Flipkart for about $16 billion (around Rs 1.05 trillion) in May.

"We already have full details of all the payments made by Walmart to different investors. In some of the cases, taxes have been withheld. In many other cases, taxes have not been withheld, that's what we are examining right now.

"We have asked those investors to give us details to show why they are not taxable," Central Board of Direct Taxes (CBDT) member Akhilesh Ranjan said on the sidelines of a CII event.

As many as 44 shareholders of Flipkart, including significant ones like SoftBank, Naspers, venture fund Accel Partners and eBay, sold their holdings to Walmart.

The law requires the buyer to withhold tax while making payment to the sellers, in case they are not exempted from levy of capital gains tax.

The CBDT member further said the revenue department has sold almost all of Cairn Energy Plc's attached shares to recover part of the Rs 102.47-billion retrospective tax demand.

Ranjan, who was recently appointed as head of new direct tax code panel, said though administration of General Anti-Avoidance Rule (GAAR) is complex, it will be used in worthwhile cases.

He further said that as head of the new direct tax code panel, his endeavour will be to simplify the direct tax law and remove ambiguities.

Walmart has reportedly paid over Rs 74.39 billion as taxes to the government on payments made by it to major shareholders of Flipkart.

First Published: Tue, December 04 2018. 16:15 IST
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