SC Verdict on Tiger Global Tax Rattles Global Investors, Redefines India-Mauritius Treaty

• The Supreme Court ruled against Tiger Global, stating its $1.6 billion Flipkart stake sale to Walmart in 2018 is taxable, citing Mauritius units as "conduit" firms for tax avoidance.
• The verdict overturns years of aggressive tax planning, allowing India to scrutinize corporate deals and override treaty benefits claimed through sham structures.
• Foreign investors channeled $180 billion into India via Mauritius, leveraging a no-tax regime on share sales, which the 2017 treaty aimed to end with a "grandfathering clause" for pre-2017 investments.
• The SC clarified that India's anti-tax-evasion law (GAAR) can deny treaty benefits if a transaction lacks genuine commercial substance, effectively nullifying grandfathering protection.
• The ruling has made investors jittery, with lawyers receiving anxious calls, and raises concerns about increased scrutiny of past deals and India's tax environment.

Why It Matters: SC's Tiger Global tax ruling strengthens India's anti-tax evasion stance, unsettling global investors and redefining treaty benefits.