India, Mauritius agree to push forward negotiations on DTAT; sign five pacts
PM Modi with his Mauritian counterpart, Sir Anerood Jugnauth. (Source: Indian Express Archive)
India and Mauritius have agreed to push forward their negotiations for a long pending revision of the Double Taxation Avoidance Treaty (DTAT) on, asserting that their objective is to prevent the ‘abuse’ of the convention.
Addressing a joint news conference with PM Modi, Mauritian Prime Minister Sir Anerood Jugnauth said, “We appreciate that already India postponed the consideration of the General Anti-Avoidance Rule (GAAR) until 2017. However, we have stressed on the initiatives taken by Mauritius to build substance within our offshore jurisdiction. I have requested PM Modi to give his full support on the DTAA as it is of prime importance for our global business sector.”
In response, PM Modi said, “I have assured Prime Minister that we will do nothing to harm this critical sector of one of our strongest strategic partners in the world. I also conveyed our deep appreciation for the support and cooperation offered by Mauritius on information exchange on taxation,”
On the first day of Prime Minister Narendra Modi’s two-day visit to the strategic Indian Ocean island nation, India also offered $500 million concessional line of credit to Mauritius for key infrastructure projects. The two nations signed five pacts, including one on ‘Ocean economy,’ which will provide an extensive framework for cooperation.
“I consider our security cooperation to be a cornerstone of our strategic partnership. Our agreement on cooperation in Ocean Economy is an important step in deepening our scientific and economic partnership,” said PM Modi.
On other key bilateral economic issues, Modi said the two countries should resume their discussions on Comprehensive Economic Partnership Agreement.
The (DTAA) is being revised amid concerns that Mauritius is being used for round-tripping of funds into India even though that country has always maintained that there have been no concrete evidence of any such misuse. A Joint Working Group (JWG) has been set up by the two countries to find a mutually acceptable solution.
Mauritius is one of the top sources of Foreign Direct Investment into India. During the last Financial year, India attracted $4.8 billion from Mauritius. Between April-September this fiscal, there has been an inflow of USD 4.9 billion into India.
Finance Minister Arun Jaitley recently said Mauritius is yet to agree to certain proposals for revising the treaty. “India has made certain proposals for revision of the DTAA to end roundtripping and other aspects. Mauritius is yet to agree to such revision,” he told Rajya Sabha.
Jaitley said 10 meetings of the Joint Working Group on this issue had taken place so far, the last being in November 2013.
The other agreements signed between the two nations were an MoU for the improvement in sea and air transportation facilities at Agalega Island of Mauritius, MoU on cooperation in the field of traditional system of medicine and homeopathy, programme for cultural cooperation between 2015-18 and a pact on import of fresh mangoes from India.
India also offered to establish a second cyber city in Mauritius after it helped the island set up the first one a decade ago.
Modi welcomed Mauritius’ decision to make India its preferential partner in developing its security capabilities. India also agreed to technically waiving off the visa fee for Mauritius nationals with respect to the new visa on arrival system.
Source:: Indian Express
