IT dept to wait till Sept 7 for Walmart to pay tax

FILE PHOTO: The logo of Walmart is pictured at one of their stores in Monterrey, Mexico March 6, 2017. REUTERS/Daniel Becerril/File Photo

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

Walmart Inc had completed acquisition of 77% stake in Flipkart for about $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 tax 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.

“Walmart still has time till September 7 to deduct and pay withholding tax on payments made to about 44 different shareholders of Flipkart,” the official said. Once the withholding tax is paid the tax authorities will scrutinise whether Walmart has deposited the taxes correctly as per the assessment.

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IT dept to wait till Sept 7 for Walmart to pay tax

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