The Blackstone tax case has foreign investors on tenterhooks
₹108 crore. “We are not interested in ₹108 crore immediately being protected," the ASG emphasized in the Supreme Court. “The judgment has to be ‘stay’ here (sic.) because this will replicate." Offshore funds often route their India investments through jurisdictions like Singapore, Mauritius and Luxembourg.
Such structuring is done to ensure both tax efficiency and operational efficiency. For instance, a US-based fund may set up an intermediary structure in Singapore to invest in India. In such a case, the TRC from the tax department in India would note that the fund is a resident of Singapore.
Now, the fund may claim it is entitled to benefits under the India-Singapore DTAA, which provides for concessional tax rates. However, the tax department says that the fund having a residency certificate of Singapore is not enough to claim treaty benefits. It also needs to show that it has a proper establishment in Singapore and the whole arrangement was not for tax avoidance.
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