• Rajasthan

    Cong 99
    BJP 73
    RLM 3
    OTH 24
  • Madhya Pradesh

    Cong 115
    BJP 108
    BSP 2
    OTH 5
  • Chhattisgarh

    Cong 68
    BJP 15
    JCC 7
    OTH 0
  • Telangana

    TRS-AIMIM 95
    TDP-Cong 21
    BJP 1
    OTH 2
  • Mizoram

    MNF 26
    Cong 5
    BJP 1
    OTH 8

* Total Tally Reflects Leads + Wins

Walmart may approach I-T for tax liability

By: | Published: August 10, 2018 6:35 AM

The income tax department (ITD) is expecting US retail giant Walmart to approach it within a fortnight to determine the withholding tax liability arising from its $16-billion acquisition of e-commerce portal Flipkart.

Walmart,  income tax department, US retail giant Walmart, walmart flipkart deal, Income Tax ActOn Wednesday, competition watchdog CCI approved the Walmart-Flipkart deal.

The income tax department (ITD) is expecting US retail giant Walmart to approach it within a fortnight to determine the withholding tax liability arising from its $16-billion acquisition of e-commerce portal Flipkart. On Wednesday, competition watchdog CCI approved the Walmart-Flipkart deal. “The process of application for determining the withholding tax and issuance of a certificate would be governed by section 197 of the Income Tax Act,” an official from the international taxation division of the ITD said.

Last month, Walmart had assured the I-T department that it would fulfill all tax obligations. After the deal had been announced, the tax department wrote to Walmart extending its cooperation in determining the tax liability. The letter had mentioned the impact of Section 9 (1) on the transactions.

The section deals with capital gains arising from sale of assets in India. This piece of law was amplified in 2012 after the Vodafone episode, where the government was caught on the wrong foot by attempting retrospective taxation (the Supreme Court in January 2012 ruled in the telecom giant’s favour, saying it was not liable to pay any tax over the acquisition of assets in India from the Hong Kong-based Hutchison).

“The I-T department is going through the share purchase agreement, reading in depth which investor has routed money from which jurisdiction and when and whether any treaty benefit applies to them,” the official said. He added that some stakeholders might have the benefit of bilateral treaties between India and other jurisdictions. Nangia Advisors managing partner Rakesh Nangia said lower or nil withholding tax order obtained under Section 197 before making payment to Flipkart would act as a provisional assessment of the transaction.

Get live Stock Prices from BSE and NSE and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Switch to Hindi Edition