India's Supreme Court has delivered a landmark ruling against Tiger Global in a high-stakes tax dispute, setting aside a Delhi High Court order that had previously exempted the Mauritius-based entity from capital gains tax on its 2018 sale of Flipkart shares to Walmart. The case, which involves a tax demand of approximately ₹14,500 crore (over $1.7 billion), revolves around the interpretation of the India-Mauritius Double Taxation Avoidance Agreement (DTAA). At the core of the dispute is Tiger Global's strategy of routing its investment through Mauritius and claiming exemption on an 'indirect transfer' of Indian assets, as it sold shares of Flipkart Singapore (which held Flipkart India shares) rather than directly selling shares of Flipkart India. Indian tax authorities contended that Tiger Global International III Holdings, the Mauritius entity, lacked 'substance' and was merely a 'conduit' company established primarily for tax avoidance, thereby rejecting its Tax Residency Certificate (TRC). This Supreme Court verdict is crucial for foreign investors as it will significantly influence how overseas funds structure their investments in India, particularly regarding indirect transfers and the reliance on TRCs for tax treaty benefits. The decision highlights India's ongoing efforts to curb 'treaty shopping' and align its tax regime with global anti-abuse measures, such as the OECD's Base Erosion and Profit Shifting (BEPS) framework. Both India and Mauritius have recently amended their DTAA to incorporate anti-abuse provisions, including a Principal Purpose Test (PPT), which allows for the denial of treaty benefits if obtaining a tax advantage was one of the primary purposes of an arrangement. This ruling underscores a stricter stance on economic substance over mere legal form, impacting both new and 'grandfathered' investments made before April 1, 2017.