Supreme Court Delivers ₹20,000 Crore Tax Blow to Foreign Investors, Rejects Tiger Global's Flipkart Exemption

• The Supreme Court rejected Tiger Global's claim for tax exemption on its $1.6 billion earnings from selling Flipkart stake, making it taxable in India.
• This ruling is expected to immediately generate ₹14,500 crore for the tax department and potentially over ₹20,000 crore from reopening old cases.
• The dispute centered on whether Tiger Global's Mauritius-based entities were genuine investments or merely a 'tax avoidance arrangement' under the India-Mauritius Tax Treaty.
• The Supreme Court overturned the Delhi High Court's decision, stating that 'grandfathering' benefits apply only when there's an economic purpose, not for tax avoidance.
• The verdict emphasizes that a Tax Residency Certificate alone isn't sufficient for exemption if the entity is a shell company, signaling stricter enforcement of tax avoidance rules like GAAR.

Why It Matters: Supreme Court's landmark ruling on Tiger Global's Flipkart deal tightens tax avoidance rules for foreign investors.