Walmart Paid Rs 7,439 Crore Tax On Flipkart Deal

0
95
Walmart tax

US retail giant Walmart paid Rs 7,439 crore tax on payments it made to buy out shares of 10 major shareholders of Flipkart but has not yet done so for. Walmart on September 7, the last date for depositing taxes with the Indian authorities, paid Rs 7,439 crore withholding tax on payments made to 10 shareholders of Flipkart.

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

A tax department official said, “Of the 44 shareholders in Flipkart who have sold shares, Walmart has deposited taxes for only 10 funds and entities. We have asked Walmart to explain the rationale followed while deducting or not deducting taxes from the shareholders. They have been asked to give a case to case explanation”.

The official also said “Of the 44 shareholders in Flipkart who have sold shares, Walmart has deposited taxes for only 10 funds and entities. We have asked Walmart to explain the rationale followed while deducting or not deducting taxes from the shareResponding to an e-mail query by PTI, a Walmart spokesperson said: “We take our legal obligations seriously, including paying taxes to governments where we operate.” “Following our Flipkart investment, we have completed our tax withholding obligations under the guidance of the Indian Tax authorities. We will continue to work with authorities to respond to their queries,” the spokesperson said without elaborating.holders. They have been asked to give a case to case explanation”.

Nangia Advisors LLP Managing Partner Rakesh Nangia said, “It is imperative to note that Walmart’s liability to withhold tax arises only if the underlying capital gain is liable to tax in the hands of the shareholder under the provisions of the Act read with the relevant tax treaty. Accordingly, there is a possibility that some of the shareholders fall within the ambit of Explanation 7, thereby absolving Walmart of any liability to withhold tax at source”.

Certain shareholders of Flipkart had last month approached the tax department seeking exemption from levy of the taxes. Their application is still being studied by the I-T department. “We are still studying the exemption application filed by some shareholders of Flipkart. We have not yet decided on granting or not granting exemption or lower tax rate for them,” the official said.

The Income Tax law provides for a buyer to seek withholding tax certificate from authorities after providing details of the transaction and make a case for availing lower or nil tax rates. The tax rate could be lower in case the non-resident seller invokes the provision of the double tax avoidance agreement.

However, the I-T law also provides for a taxpayer to pay taxes at a lower or nil rate if he is eligible to claim the benefits under the double taxation avoidance agreement between India and the country from where the investment was routed.

LEAVE A REPLY

Please enter your comment!
Please enter your name here