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A lobby group of approximately sixty Indian start-ups has urged the government to define the government tax stance following a Supreme Court decision last month that left investors uneasy. The businesses are worried about the potential challenge of older cross-border investments. This request is a case of trying to cool the nerves in an already strained funding environment. The issue is based on a Supreme Court manner in which Tiger Global was concerned. According to the court, the court said Mauritius-based entities that the investor used to liquidate its $1.6 billion in Flipkart were conduits that the India-Mauritius treaty sought to evade taxes. Tiger Global has also refuted that it did anything wrong and that it was acting according to the provisions of the existing treaties. It has not made any lieu comments in regard to the latest observations of the court. Nonetheless, the decision has cast greater doubts on the traditional forms of taxation that various international funds have utilised in order to funnel investments in India. The court further held that domestic anti-tax avoidance regulations would overrule treaty safeguards when abused. That perception has not sat well with the investors who, over the years, had been relying on the Mauritius structures. We do not think that the uncertainty about a single deal has increased; it is whether transactions that were previously made can now be subject to retrospective examination. The Startup Policy Forum, a representative of a number of new-age firms, sent a letter to the finance ministry to reassure it. The chief executive, Shweta Rajpal Kohl,i cautioned that conflicting signals would disadvantage investors. The group urged the government to ensure that investments they made before 2017 would not be liable to new claims of taxes. The firms in the forum are Meesho, Acko, and Swiggy. Foreign capital has been directed to these startups, and much of this capital has been in forms of money laundering to Mauritius. To them, policy certainty is a direct factor impacting future fundraising and valuations. There has been an attempt by the government officials to ignore the concerns. Other Solicitor General N Venkataraman said that concerns that the decision would be bad on an investment front were unwarranted. He referred to the discussion as a diversion instead of a structural threat to capital inflows. Statistics indicate that Mauritius has a long-standing history as the biggest source of foreign investment for India. The inflows received by the island country went up to about 171 billion in the last twenty years, which is about one quarter of the total foreign investments. We observe this scale as the explanation why the industry desires expediency on the issue before feeling gets any weaker.

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