Source: Economic Times

Government today said Mauritius is yet to agree to certain proposals to the long pending revision of bilateral tax treaty.

“India has made certain proposals for revision of DTAC to end round tripping and other aspects. Mauritius is yet to agree to such revision,” Finance Minister Arun Jaitley said in a written reply to the Rajya Sabha.

A Joint Working Group has been set up by the two countries to find a mutually acceptable solution towards revision of Double Taxation Avoidance Convention (DTAC).

Jaitley said 10 meetings of the JWG have taken place so far, the last being in November 2013.

Negotiations to amend the Indo-Mauritius tax treaty have been hanging fire for a long time amid India’s apprehensions that it is being misused to route unaccounted money and evade taxes.

Round-tripping is usually referred to routing of India’s domestic investments through Mauritius to take advantage of the DTAC between the two countries.

While Mauritius says it has strict checks and balances in place, uncertainties over the tax treaty have adversely affected investment flows between the two nations.

Mauritius is one of the top sources of foreign direct investments into India. During the last financial year, India attracted $4.85 billion from Mauritius.

Between April-September this fiscal, there has been an inflow of $4.19 billion into India.