"Future of India's geopolitical tax jurisprudence has been defined by the Supreme Court. India is standing on its moment right now, leading the way in tax jurisprudence."

“There are two ways to look at the Judgement. One is technically. It is impossible to fault the SC on the proposition that on tax matters, India cannot cede its sovereignty. Tax treaty is meant for genuine residents and to for those using it as a conduit. This conclusion cannot be faulted technically. On the other hand, the larger question is what signals are we giving to the foreign investors? We have a Circular stating the TRC is sufficient. That has not been withdrawn. Then we have grandfathering under the DTAA. Now we say that the Circular is not the law. What message are we giving to the foreign investors on the certainty of tax regime of the country? Technically, the Judgement seems quite logical; but in the light of existing background and precedents, it sends a totally confusing message to overseas investors at a time that the foreign investment is waning."

“The SC reversing the Delhi HC judgement has held that a tax Residency Certificate (TRC) is not a conclusive test for treaty benefit particularly if the tax benefits were arising due to interposition of an entity (which is entitled to treaty benefit) is a conduit.

Conduit entities have been a subject matter of debate internationally and are frowned upon by tax administrations for grant of treaty benefit. In the Tiger Global facts, the  SC Seems to have concluded that the treaty benefit was being availed by a conduit, a tax resident of Mauratius.

The SC has invoked GAAR law in coming to that decision - the GAAR law empowers the tax administration to invoke in situations of impermissible agreements / tax abuse arrangements.

The implications are wide - the CBDT circular, past SC verdict ( Azadi Bacho) stand over ridden/ modified. Each transaction now will have to be viewed on facts and a general application of legal principles articulated by Courts and tribunals will no longer hold as good law.

Each arrangement will have to be tested on the principles held by SC in Tiger Global case.

In light of the SC ruling the notification of the protocol to the India Mauritius treaty, which would have introduced the PPT seems unnecessary."

The judgement and reasoning thereof is not available as yet and my views are based on pronouncement in the open court.

“There is an increasing sense that global geo-economic developments are subtly shaping judicial reasoning in international tax cases. Contemporary narratives around base erosion, profit shifting, economic nationalism and the re-assertion of taxing rights over "source" appear to be influencing how courts frame treaty interpretation, often through the lens of "tax sovereignty". The concurring observations made by Justice Pardiwala seems to reflect this. It may however be noted that Tax Treaty is itself a product of sovereign negotiation and effect to legal obligations under it is subject to treaty text, context and purpose. One eagerly awaits a copy of the order to see the legal interpretation and reasoning on which the conclusions are based."

“The Supreme Court’s ruling against the taxpayer marks a watershed moment for cross-border tax planning into India. By characterising the structure as an impermissible tax avoidance arrangement and denying the benefit of the India–Mauritius DTAA, the Court has clearly signalled that treaty entitlement will be tested on substance, not form. This judgment significantly raises the bar for offshore investment structures that rely primarily on treaty residency without demonstrable commercial rationale. It reinforces the growing judicial alignment with GAAR principles.
 
However, the really critical aspect to be checked when the ruling is out will be how the Court ultimately addresses the continuing relevance and scope of CBDT Circular 789. Clarity on this aspect will be critical in determining whether this ruling remains fact-specific or reshapes the broader treaty entitlement landscape.  This circular has historically provided us comfort on Mauritius residency-based treaty entitlement. The tax community will be watching closely for the Court’s observations on this aspect, as it could materially shape the scope of the ruling’s applicability. Until then, I would read this decision as a caution against aggressive, factually weak structures rather than a wholesale dismantling of the India–Mauritius DTAA."

“Understandable conclusions: if TRC simpliciter is the final word for treaty entitlement, considering mobility of the capital in the modern world, Indo Mauritius treaty is India’s treaty with the world. The fine print, however, is eagerly looked forward to. Justice Pardiwala’s note on judicial endeavour to find a point of equilibrium between tax treaties and tax sovereignty appears fascinating, innovative and compelling."

"The Supreme Court’s ruling in the Tiger Global case overturns the High Court decision and denies treaty benefits where transactions lack genuine substance, signaling that a Tax Residency Certificate alone is insufficient. This judgment marks a significant shift toward substance-over-form in India’s tax regime. It also raises critical questions on what constitutes adequate commercial substance, creating uncertainty for global investors. Multinational enterprises must urgently revisit their holding structures and governance frameworks to mitigate tax risks. Clear guidance will be essential to maintain investor confidence and ensure India remains an attractive destination for cross-border investments."

"Mere having a TRC is not sufficient to avail Treaty benefits and substance over form is crucial. The judgement narrates that India’s sovereignty needs to be respected. The Mauritius debate is far from over. Whereas on policy matter, this seems perfect, the gap comes at the level of administration.

One only hopes this doesn’t become another Vodafone and create more uncertainty and an adverse foreign investment climate"

“1. Having TRC cannot be the mere reasoning to claim Treaty benefit. To that extent Azadi Bacholan case will have a limited application.

2. ⁠How far Substance test is critical to claim Tax Benefit.

3. ⁠If arrangement is impermissible arrangement what is the role of DTAA.

4. ⁠what is an impermissible avoidance arrangement in the context of DTAA

5. ⁠Finally the observations of SC on this ruling ia important for tax community."

"Tiger Global judgement is indeed a landmark judgement in the context of tax treaty; substance over form and also sovereignty

The observations in Para 37 regarding TRC being produced not being a binding order issued by a an authority is in the context of substance over form. The only concern is whether this can lead to over zealous questioning of all TRCs or calling for information or formats which would be impossible for an assesse to meet given that the TRCs are issued by a government agency of another country."

Initial thoughts 
While the ruling offers insightful observations on tax sovereignty, it raises significant practical concerns. If a TRC is no longer considered sufficient and conclusive proof for tax residency and is subjected to a substance-based test, it could trigger widespread challenges and necessitate a re-evaluation of existing structures.

The concept of “substance” itself is inherently subjective and case-specific. The judgement raises concerns for routine cross-border payments u/s 195, where a valid TRC has generally considered sufficient to discharge withholding obligations. It is unclear whether payers and also tax practitioners issuing Form 15CB, will now be required to undertake additional diligence beyond the TRC for every transaction. The ruling also raises questions on the relevance of section 90(4) & (5), which statutorily recognise the TRC and Form 10F requirement. 

While each jurisdiction prescribes its own criteria for issuing a TRC, the ruling indicates that Indian tax authorities may independently question the substance. This decision is likely to spark significant professional debate and raises a broader concern on the diminishing certainty in cross-border taxation.

"The Tiger Global verdict clearly changes how tax treaties will be looked at in India. A Tax Residency Certificate by itself is no longer enough — it only shows where a company is registered, and can be a preliminary document to access the treaty, but not conclusive evidence that the transaction truly deserves treaty benefits. If tax authorities feel a structure is set up mainly to avoid tax, they can now look at who really controls the investment and who gets the real profits. Even old, grandfathered Mauritius structures are not fully protected if they lack real substance. Principles are similarly explained in the Indian GAAR framework, which was also further elaborated in my book on GAAR. Going forward, investors will need real presence and commercial purpose in treaty countries, not just paperwork."

"On reading this excerpt of hon'ble Justice Pardiwala on Tax Sovereignty on Taxsutra exclusive- "in the new era of geo-economic uncertainties, it is better prudence to retain tax sovereignty to oneself than to yield. ", it would be worth thought pondering whether the current evolving geo-political tensions especially arising out of weaponisation of tariffs, has also played a role in asserting tax sovereignty by way of this judgement."

"The verdict signals a stricter approach to tax treaty interpretation and a heightened emphasis on economic substance over legal form. The Supreme Court, while allowing the Revenue’s appeal in the Tiger Global matter, held that the mere possession of a TRC does not preclude a detailed enquiry where an interposed entity is alleged to be a conduit for tax avoidance. It sets out a clear prompt for investors to reassess holding structures and exit strategies, potentially dampening foreign investment appetite and altering how future M&A transactions involving India inbound, are structured. This approach reinforces the principle that treaty benefits are available only to genuine tax residents and not to layered structures, if created to secure unintended tax advantages. Where the evidence demonstrates that intermediary entities function merely as conduits, lacking real economic purpose, decision-making authority, or business activity, the Revenue could pierce the structure and deny treaty protection."

Tax Residency Certificate is not a guarantee-card for claiming tax-treaty benefits

"In a landmark ruling, the Hon’ble Supreme Court (‘SC’) has reversed the Delhi HC’s judgment in the Tiger Global case, holding that capital gains arising from the indirect transfer of Flipkart Singapore shares by Mauritius-based Tiger Global entities are taxable in India. The Delhi High Court had earlier ruled in favour of the Assessees, holding that TRCs, satisfaction of LOB conditions and the grandfathering provisions under the India–Mauritius DTAA entitled them to treaty protection, in the absence of proven fraud or sham. 

However, the SC took a contrary view after a threadbare analysis of the India–Mauritius DTAA, CBDT Circulars 682 and 789, the rulings in Azadi Bachao Andolan and Vodafone, GAAR provisions, the Finance Act, 2013 and the 2017 treaty amendments. The Court observed that these amendments were introduced to curb round-tripping and treaty abuse, noting that mere possession of a TRC cannot bar enquiry where an interposed entity functions as a conduit to avoid tax. It further held that CBDT circulars stood superseded by statutory amendments and could not override legislative intent. 

Crucially, the Court ruled that GAAR applies to any arrangement yielding tax benefits on or after 1 April 2017, irrespective of the date on which the investment was made, rendering the cut-off date irrelevant. On facts, the Court concluded that the Revenue had established an impermissible avoidance arrangement, denied DTAA benefits and upheld the taxability of the gains in India."

Some startling fundamental facts for better appreciation of Supreme Court judgement by Mr Sunil Agarwal, Senior Standing Counsel for Income Tax Department before Delhi High Court, whose office drafted and filed the Counteraffidavit in High Court and represented Revenue before High Court along with Sh. GC Srivastava, Revenue’s Special Counsel;

• One Mr Charles Coleman, based in USA and Founder of Tiger Global Management LLC, USA declared himself as the Beneficial owner of these Mauritius entities in statutory filings before USA authorities (Securities Exchange Commission, USA) and Mauritius authorities (Financial Services Commission, Mauritius for GBL- I License).
• Competitive Post-Tax Return (not any reason of commercial expediency) was declared as Sole reason for choice of Mauritius as tax-residency jurisdiction.
• Authority to operate Tiger’s bank accounts in Mauritius for transactions in excess of USD 2,50,000/- was with Mr. Charles P. Coleman and other senior personnel of TGM USA, not with the directors of Petitioners.
• Account Opening Form filed by Tiger entities before bank in Mauritius declares Mr Charles Coleman as Beneficial Owner of Bank Account.
• Transactions being international ie USA, Singapore, Mauritius, India etc…., Tiger Mauritius entities declared ZERO Travel Expenses by Mauritian Resident Directors in all years.
• Even at the time of meetings for negotiations for sale of these shares to Walmart, some representative of Tiger USA was mandatorily present either physically or telephonically.