If SoftBank decides to exit Flipkart by selling its 20-22 percent stake in the Indian e-commerce giant, it would be able to proceed with the Paytm Mall deal
Skeptical over stake sales in Flipkart to Walmart, SoftBank is discussing to invest as much as USD 3 billion in Paytm Mall, reported The Economic Times citing people familiar with the matter.
In April this year, SoftBank had announced a USD 400 million investment in the Indian online marketplace for a 21 percent stake. Since then, the Japan-based Internet giant is in talks to take up its stake in the company. However, its agreement with Flipkart restricts it from investing more than USD 500 million in Paytm Mall until 2020.
If the Japanese conglomerate decides to exit Flipkart by selling its 20-22 percent stakes in the Indian e-commerce giant, it would be able to proceed with the Paytm Mall deal.
At present, the total value of its stake sale to Walmart will be worth about USD 4 billion, as per the publication. But, the company is yet to decide over the sale of shares as it is reportedly considering to seal the deal without attracting a hefty tax liability.
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Meanwhile, the tax department will seek share purchase agreement from Flipkart on the mega USD 16 billion buyout by US retail giant Walmart to assess tax liability and also to find out whether the GAAR provisions can be invoked, an official told news agency PTI.
Currently, the department is going through the Section 9(1) of the Income Tax law, which deals with indirect transfer provisions, to see if the benefits under the bilateral tax treaties with countries like Singapore and Mauritius, could be available for foreign investors selling stakes to Walmart.