Mauritius is leaving no stone unturned to ensure continuance of benefits under its double taxation avoidance agreement (DTAA) with India. A delegation of senior officials from Mauritius is arriving here on Thursday to hold parleys with their Indian counterparts.
The team would comprise officials from various departments including finance, diplomatic sources said. A meeting between revenue secretary KM Chandrashekhar and his Mauritian counterpart is part of the detailed itinerary of the visiting delegation, they added.
India is planning to review the DTAA with Mauritius which provides long-term capital gains for a host of foreign institutional investors (FIIs). The Mauritius side does not want the existing arrangement which is unique to be disturbed.
The Mauritius team is keen to touch upon various issues related to the comprehensive economic cooperation agreement (CECA) with India, the sources said. India has already offered to provide duty sops for Mauritian sugar, garments and rum, subject to quantity ceilings.
While tariff concession for goods is being discussed under a proposed preferential trade agreement (PTA) which would be part of the CECA, the DTAA review is significant since Singapore is also demanding a similar arrangement. Last year, Singapore entered into a CECA with India and is keen to obtain the tax benefit now available only to FIIs registered in Mauritius.
India has set up a working group to study the DTAA and to make recommendations for the proposed review. The key changes sought include shifting from residence-based taxation to source-based taxation. As of now, a Mauritian government certificate of residence entitles a company for exemption from capital gains tax.