The notices were sent to the promoters of India’s top e-tailer along with similar ones sent to 35 other stakeholders who had some shareholding in the company. Both the Bansals had more than 5% stake each in Flipkart. In a share-purchase agreement signed between Walmart International Holdings and Flipkart Singapore on May 9, the former acquired 77% of the shares of Flipkart for around $16 billion. In a notice served to Walmart earlier, the tax department had asked it to furnish details of 46 shareholders of Flipkart, and how much each of them gained from the deal.
According to sources, the Bansals have been asked to explain the total payment received from the sale of their venture to Walmart, the capital gain tax liability and how the tax payments have been scheduled. “There was a query received with regard to sale of shares and payment of advance taxes. It happened a few months ago and I had already responded to the same,” Binny told TOI when asked about the I-T notice.
So far, the Bansals have not responded to the I-T notice sent to them on October 18, sources said. The responses of other Indian shareholders have started arriving, they said.
After the I-T notice, Walmart had deposited Rs 7,439 crore with the I-T 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 again wrote to Walmart International Holdings, the buyer of majority shareholders of Flipkart Singapore, to explain the break-up of how much tax has been deducted from payment to each shareholder. Flipkart is a Singapore-registered company and SoftBank and eBay were its major shareholders prior to its sale to Walmart.
While short-term capital gains 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 the DTAA with Singapore. The tax department is yet to calculate the actual tax applicable since it is still investigating some alleged suspicious transactions and investment flow in the company.