DTAA regulations between India and Mauritius follow strictest rules

Iqbal Rajahbalee, former CEO of the Mauritius Offshore Business Activities Authority (now Financial Services Commission) discussed the stance taken by Mauritius on the double taxation treaty between Mauritius and India.

This was done during a televised debate. There is pressure from some quarters that want some aspects of this treaty with Mauritius to be reviewed. The interview was broadcast on CNBC-TV18.

Answering a question on the DTAA revision, Rajahbalee stated that if a person uses Mauritius to invest in India, it is normal to make use of an efficient tax system.
He added that this is a worldwide practice. He also mentioned that this is not seen or read as a ‘captivation’ as no fraud is taking place, because the laws are properly observed and the application of the treaty is made under the strictest regulations.

Rajahbalee also indicated that as former president of the FSC, he can assure that this body has always responded to requests for investigations from the CBDT and even the SEBI in India to ensure that there is no abuse of the treaty.

He added that the treaty can help the two tax authorities to resolve problems that may exist in order to avoid any abuse.

He further stated that if the local jurisdiction closes for any reason or becomes less competitive, investment in India will pass through other jurisdictions like Cyprus, Singapore, Luxembourg and elsewhere.

Making a difference in what is said in the press and what is really happening between the two governments are two different matters. If we stay in business, the question of capital gains absolutely normal.