Now that the Walmart-Flipkart deal has been green signalled by the Competition Commission of India (CCI), US retail giant Walmart is now expected to close the deal within a week or a fortnight at the most.
Walmart will approach the Income Tax (IT) department for withholding tax determination under Section 197 of the IT Act (Income Tax Act), regarding the deal.
The Walmart-Flipkart deal is expected to generate a staggering revenue of $1.5-2 Bn in taxes for the Indian government.
According to an IT official, “We were told that the deal would be closed within a week of the Competition Commission of India (CCI) approval. So we expect them (Walmart) to file (an application) to the IT authorities, seeking withholding tax certificate under Section 197 within a fortnight.”
Read: Decoding the Tax Implications of the Flipkart-Walmart Deal
After its failed attempts to enter India in the past, and now with the dream within arm’s reach thanks to its Flipkart acquisition, the last thing Walmart wants is to get into any further legal trouble. In fact, it has already assured the IT department that it will comply with all the tax obligations related to the deal.
Last month, in a letter written to the IT department, a Walmart spokesperson said, “We take seriously our legal obligations, including the payment of taxes to governments where we operate. We will continue to work with Indian tax authorities to respond to their inquiries.”