It has been almost two years since US-based giant retailer Walmart acquired 77% stake in Flipkart. But it seems the tax-related issues for stakeholders, especially offshore ones, in Flipkart is far from ending.
As per the latest report, a club of foreign stakeholders has approached the Authority of Advance Rulings (AAR) demanding more clarity on the capital gains taxes arising out of the Walmart-Flipkart deal.
AAR has also taken up some of the cases from these stakeholders, who are now opposing the deduction by Walmart, in February, according to a Business Standard report. It further added that the order on the matter might take up four-five months.
Some of the stakeholders have also sought a lower deduction certificate under Section 197 of the I-T Act from the tax department. The tax officials are still considering few of them while some were rejected.
Meanwhile, foreign firms are allowed to file for tax returns if they think that their tax liability was less than what has been deducted, added the report.
Earlier in Sept 2018, Walmart had paid Rs 7,439 crore tax on payments it made to buy out shares of 10 major shareholders out of 44 shareholders, which included some major investors such as SoftBank, Naspers, venture fund Accel Partners and eBay, of Flipkart in the $16 billion deal.
There is a Rs 10,000 crore tax amount estimated on the deal.
Tax officials had earlier sought an explanation from the US retailer on the calculation and rationale followed in leaving out 34 shareholders.
Entarckr queries to Walmart seeking details on the matter remained unanswered until the publication of the report.
Earlier, Walmart had said that it is legally not required to withhold tax on payments made to foreign shareholders with a stake of less than 5 per cent and no right to management.
Soon after the Walmart acquisition, the deal came under questions over flouting FDI norms, predatory pricing and other concerns raised by vendors and sellers of the online marketplace platform.