Tax cloud hangs over Walmart-Flipkart deal

Experts said tax authorities are likely to closely verify the quantum of withholding tax deducted by the buyers in this transaction

More than meeting the regulatory guidelines, tax-related issues may continue to vex the Walmart-Flipkart transaction for some time to come. Whether tax authorities allow carrying forward of existing losses of Flipkart India – amounting to around $2 billion – under the new management, is likely to be a key bone of contention, point out tax experts. The taxability of capital gains accruing to erstwhile shareholders of Flipkart who have sold off their shares is the other issue that needs more clarity, experts added.

Experts point out that even though shares of Flipkart Singapore, a company registered outside India, will be