Walmart

Pay Flipkart deal tax $2 Bn within a week: IT dept to Walmart

Walmart

The Income Tax department has fixed September 7 deadline for Walmart to deposit the withholding tax arising out of its deal with Flipkart.

The deadline comes after Walmart got final approval from Competition Commission of India (CCI) to acquire 77 per cent stake in Flipkart in a $16 billion deal, which was announced in May.

According to a Business Standard report, the US-based retail king has to pay around $2 billion, more than 10 per cent of the transaction value.

For uninitiated, the amount is a retention tax, which is first deducted at source and paid in advance by a buyer. This withholding tax is deducted at source on interest or dividends paid to an entity residing outside the country. It will cover the tax on capital gains to be paid by investors in Flipkart.

Further, the income tax department would examine and assess the total liability after Walmart deposits the tax.

According to a tax department official, most Sellers (Flipkart investors selling their stake to Walmart) might claim that they are exempt under the India-Singapore double tax avoidance treaty. So Walmart will need to asses the liabilities carefully.

It is worth to be noted that Flipkart’s parent entity is registered in Singapore and many of its investors are based out in foreign countries. Some of them have filed withholding tax certificates under section 197 of the IT Act, which says that any NRI selling shares can be asked that why they should be exempted or pay lower tax in India.

Also, as per Section 9(1) of the Income Tax Act, if any foreign entity has more than 50 per cent of its assets in India, from which it derives value, it will be considered an Indian entity and has to be taxed as per the local laws.

Flipkart has got backing from SoftBank, Tiger Global, Naspers, and Accel Partners.

On the other side, Walmart is ready to cooperate with the government guidelines on tax issues and it will respond the tax obligations accordingly.

Walmart

Pay Flipkart deal tax $2 Bn within a week: IT dept to Walmart

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Below is the bank details:

 
Amount: INR 3,19, 000 (After Adding 18% GST and Deducting 2% TDS)
Bank Name: ICICI Bank
Account Type: Current
Account Name: Bareback Media Private Limited
Account Number: 002105023595
IFSC Code: ICIC0000021
 
Kindly make the payment to confirm your seat for Unicorn trip 2.0. For any other queries/concern: pls drop a email on: [email protected]

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