Apex in the News

Benefits of the Mauritius India double taxation avoidance treaty (DTA) - Chandra Gujadur

18 July 2010

Chandra Gujadhur, Managing Director of Apex Fund Services (Mauritius) Ltd. discusses the benefits of the Mauritius India double taxation avoidance treaty (DTA) and how it is a timely reminder to companies and administrators to exercise greater diligence in ensuring that control and management.

Benefits under the Mauritius India double taxation avoidance treaty (DTA)

In a recent ruling in the case of E*Trade Mauritius Ltd, a Mauritius resident company and holder of a valid Tax Residence Certificate (TRC) issued by the Mauritius Revenue Authority, the Authority for Advance Rulings (AAR) in India has held that capital gains on transfer of shares held in an Indian company to a company resident in Mauritius is not liable to tax in India under the provisions of the DTA.

In reaching its decision the AAR relied on the decision of the Supreme Court in the Azadi Bachao Andolan case where the Supreme Court upheld the Circular 789 issued by the Central Board of Direct Taxes in India that a valid TRC is a presumptive evidence of beneficial ownership of the shares and the gains arising there from.

While the ruling is of significant importance for investors using Mauritius for onward investment into India, it serves as a timely reminder to companies and administrators to exercise greater diligence in ensuring that control and management of the companies not only reside in Mauritius but must be seen to reside in Mauritius."