US-based retail giant Walmart said that it has complied with the tax obligations for the Flipkart acquisition deal that was worth $16 billion for a 77% stake. The deal is set to bring in ₹10,000 crores ($1.3 billion) in taxes for the government of India.
The payment of the tax dues finally ends the uncertainty over the $16 billion deal, after the announcement by Walmart.
“We take our legal obligations seriously, including paying taxes to governments where we operate. Following our Flipkart investment, we have now completed our tax withholding obligations under the guidance of the Indian Tax authorities,” said a Walmart spokesperson.
As per the provisions of the I-T law, Walmart had to deduct withholding tax on payments made to sellers and deposit it with the Indian authorities by 7th September. In case of Walmart-Flipkart deal, the withholding tax pertains to the capital gains made by the shareholders of Flipkart.
Out of the 44 stakeholders of Flipkart, who sold their stake to Walmart, the significant ones included Softbank, Naspers, Accel Partners, Ebay, Sachin Bansal, and Binny Bansal.
While the dues have been paid by Walmart, the IT department was quoted as saying that the tax officers will now look into the taxes deposited by Walmart for every stakeholder who sold shares in Flipkart. If any discrepancy is found, Walmart will be notified, seeking its response for failing to deposit the taxes.
The tax department will be keeping close tabs on this deal and any other subsequent large value transactions to avoid any tax avoidance by any entity.
In recent news, Flipkart had invested in an automation startup GreyOrange and helped it raise ₹1,000 crores in series C round. Flipkart is also looking to increase sales and market share through private labels, exclusive labels, and fashion vertical, this festive season.