India's Supreme Court has delivered a landmark tax ruling, making Tiger Global liable for capital gains tax on its $1.6 billion sale of a Flipkart stake to Walmart in 2018. This decision has sent ripples of concern through global investor communities, particularly those who have historically routed investments into India via Mauritius to leverage tax treaty benefits. The court found that Tiger Global's Mauritius entities were 'conduit' firms lacking 'commercial substance' and were primarily designed for 'impermissible tax avoidance'. For decades, Mauritius served as a favored route for foreign investors, accounting for a significant portion of foreign direct investment into India due to the India-Mauritius Double Taxation Avoidance Agreement (DTAA) which exempted capital gains tax on share sales in India. While India amended the DTAA in 2016 (effective April 2017) to allow taxation of capital gains on new investments, a 'grandfathering' clause protected pre-2017 investments from the new tax regime. However, the Supreme Court's latest verdict challenges this protection, ruling that India's General Anti-Avoidance Rules (GAAR) can override treaty benefits, even for grandfathered investments, if a transaction lacks genuine commercial substance. This ruling has broad implications, fundamentally altering the tax treatment of offshore investment structures and increasing scrutiny on past deals. Legal and financial experts are reporting 'nervous investor calls' from Europe and the U.S., as funds now face the prospect of re-evaluating their tax liabilities and potentially higher tax exposure. The judgment emphasizes that merely possessing a Tax Residency Certificate (TRC) from Mauritius is no longer sufficient to guarantee treaty benefits; investors must demonstrate real economic presence and a legitimate business rationale. The Indian government views this as a strengthening of its tax sovereignty and a move to curb treaty abuse and round-tripping of funds. The decision is poised to redefine international tax jurisprudence in India and is a critical development for the country's investment landscape.