IT dept to wait till Sep 7 for Walmart to pay tax on Flipkart deal

TIL Desk/Business/New Delhi/ The Income Tax Department will wait till September 7 for settlement of withholding tax by Walmart on payments made to about 44 shareholders exiting e-commerce firm Flipkart before it proceeds in the case, an official has said.

US-based retail giant Walmart Inc had completed acquisition of 77 per cent stake in Flipkart for about USD 16 billion deal in mid-August. As per the provisions of the I-T law, Walmart has to deduct withholding tax on payments made to sellers and deposit it with the Indian authorities on the seventh day of the subsequent month, which falls on September 7.

The Walmart has not yet approached the tax department to ascertain the withholding tax liability, although some shareholders of Flipkart who are exiting the e-commerce company have sought guidance on their tax liability, the officials said.

Under Section 197, seller of shares can obtain withholding tax certificate from the tax department after providing details of the transaction and make a case for availing lower or nil tax rates. The tax rate could be lower in case the non-resident seller invokes provision of the double tax avoidance agreement.