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Business

Bansal pays ₹699 crore tax on gains from Flipkart in Q1

January 02, 2019 06:20 AM

COURTESY TOI JAN2

Bansal pays ₹699 crore tax on gains from Flipkart in Q1
Pradeep.Thakur@timesgroup.com

New Delhi:

Flipkart founder Sachin Bansal has deposited Rs 699 crore as advance tax for the first quarter of 2018-19; this includes capital gains tax on his income from the sale of Flipkart stake to US retail giant Walmart. His partner and co-founder Binny Bansal is yet to disclose capital gains made on his stake sale in the ecommerce platform, sources in the tax department have said.


The I-T department had sent notices to Sachin and Binny Bansal along with other stakeholders to disclose capital gains made by sale of their shares in Flipkart. Similar notices were served on Walmart to ensure it pays withholding tax on capital gains made by foreign stakeholders of Flipkart. Walmart had late last year paid Rs 7,440 crore to the I-T department as withholding tax, months after it acquired 77% shares of Flipkart for around $16 billion. Walmart was later asked to furnish details of 46 shareholders of Flipkart and how much each had gained from the deal. According to sources, the Bansals have not yet explained total payments received from the sale of their venture to Walmart, capital gain tax liability and how tax payments have been scheduled.

Sachin’s payments have come as part of his advance tax obligation for the first quarter of the current fiscal year. Flipkart is a Singaporeregistered company, and SoftBank and eBay were its major shareholders prior to its sale to Walmart on May 9. 2018.

While short term capital gain tax of a maximum of 40% may be applicable on SoftBank, eBay will also have to pay short term capital gains tax but its rate of tax is likely to be 20% considering DTAA (double taxation avoidance agreement) with Singapore. The tax department is yet to calculate the actual capital gains tax applicable in the deal since it is still investigating the complex structure of investments made in Flipkart Ltd (Singapore), particularly by eBay, and has sought complete data wise fund flow from eBay and other subsidiaries into Flipkart Ltd.

eBay had made investments in Flipkart Singapore through a network of companies registered in various jurisdictions. A Flipkart spokesperson had earlier refused to comment on the ongoing I-T proceedings.

After the I-T notice, Walmart had deposited Rs 7,439.4 crore with the tax department as withholding tax on account of payments made to non-resident shareholders of the company. Not satisfied with the withholding tax deposited with the government, the I-T department further asked Walmart International Holdings, the buyer of majority shareholders of Flipkart Singapore, to explain the breakup of how much tax has been deducted from payment to each shareholder

 
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