India-Mauritius tax treaty likely to not have retrospective taxation effect

The channel also reported that India will inform Mauritius and notify the protocol to make it applicable.

A treaty between India and Mauritius is not likely to have retrospective taxation effect as tax will be imposed only after the date of the signing of the agreement between the two, news channel CNBC-TV18 reported on April 12, citing sources.

It was understood that new provisions with respect to India-Mauritius treaty will apply to even past investments where the taxable event occurs post coming into effect of the protocol.

However, CNBC-TV18 reported that it is not retrospective as taxability is only post the date of the treaty coming into effect even where the investments have been made at an earlier date.

The channel also reported that India will inform Mauritius and notify the protocol to make it applicable.

India and Mauritius have signed a protocol to amend the double taxation avoidance agreement (DTAA), which included a principal purpose test (PPT) to decide whether a foreign investor is eligible to claim treaty benefits.