https://economictimes.indiatimes.com/news/economy/policy/pe-firm-used-mauritius-entity-to-avoid-tax-on-rs-14500-crore-made-from-flipkart-walmart-deal/articleshow/76457795.cms#:~:text=The%20Authority%20of%20Advance%20Ruling,of%20Flipkart%20stake%20to%20Walmart.

Very discouraging to see this headline in a respected business newspaper like ET. If that’s how they charcaterized it, I wonder how the popular press sees it. India-Mauritius Double Tax Avoindance Treaty is/was a bonafide deal. It was a legitimate way to invest in India, otherwise why would India have the treaty? Indian Tax authorities are random, capricious and arbitrary. It is taxes uber alles! Jobs and wealth creation be damned.
Indian startup ecosystem has been a bottomless pit for investors. Flipkart has been held out as a spectacular exit for the investors. It has been the only one and it too was a strange one, a money losing company was acquired by a laggard Walmart, who did not want to lose out to Amazon in a potentially large market. With post deal rules change by GOI, it is starting to look like a poisoned chalice for Walmart too.
Now tax authorities want to partake in the gains of investors, even though they have no real legal basis. Mauritius Treaty was put under cloud when the Indian authorities started to talk needing a presence of substance for investors in Mauritius without ever defining what that really meant.
VC investors are long term investors in high risk startups. Most of startups fail and investors lose their full investments often. They depend on occasional hits for their returns. It is imperartive that rules of the game are clear and stable; and respected by tax authorities. It is just a matter of time VC investors will tire of India, as FDI investors in manufacturing already have.

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