Please find newsflash analysing the landmark judgment of the Hon’ble Supreme Court in the Tiger Global–Flipkart exit matter, wherein the Court has ruled on treaty benefits under the India–Mauritius DTAA, upheld the override of treaty benefits by GAAR, and significantly limited the conclusiveness of a Tax Residency Certificate (TRC).

Key highlights of the ruling include:

  • The Supreme Court held that the sale of shares of Flipkart Singapore by Tiger Global’s Mauritius entities constituted an impermissible avoidance arrangement, lacking commercial substance, and was designed solely to evade tax.
  • The Court affirmed that GAAR can be invoked for tax benefits arising after 1 April 2017, even if the underlying investments were made prior to that date, thereby narrowing the scope of grandfathering.
  • It was categorically held that a TRC is only an eligibility condition and not conclusive evidence of treaty entitlement, especially post the introduction of Section 90(2A) and the GAAR framework.
  • The judgment reinforces the continued relevance of Judicial Anti-Avoidance Rules (JAAR) and the substance-over-form doctrine, even independently of GAAR.
  • The ruling highlights India’s tax sovereignty and signals enhanced scrutiny of layered cross-border investment structures, particularly where commercial rationale and effective control are questionable. 

This decision is expected to have far-reaching implications for private equity structures, indirect transfers, and treaty-based tax planning, and marks a decisive shift towards substance-driven evaluation of cross-border arrangements.

Please feel free to reach out in case of any pertinent doubt/ query. 

Click Here to Download-SC examines GAAR, TRC and treaty entitlement in Tiger Global-Flipkart case.