MAURITIUS

29. Agreement for avoidance of double taxation and prevention of

fiscal evasion wit Mauritius
Whereas the annexed Convention between the Government of the Republic
of India and the Government of Mauritius for the avoidance of double
taxation and the prevention of fiscal evasion with respect to taxes on income
and capital gains and for the encouragement of mutual trade and
investment has come into force on the notification by both the Contracting
States to each other on completion of the procedures required by their
respective laws as required by !rticle "# of the said Convention $
%ow therefore in exercise of the powers conferred by section &' of the
Income(tax !ct )&*) +,- of )&*). and section ",! of the Companies
+/rofits. Surtax !ct )&*, +0 of )&*,. the Central Government hereby
directs that all the provisions of the said Convention shall be given effect to
in the 1nion of India2
!otification " GSR %o2 &"'+3. dated *()"()&#-2
4354 67 !%%3538 C6%93%4I6% 8!438 ",(#()&#"
The Government of the Republic of India and the Government of Mauritius,
desiring to conclude a Convention for the avoidance of double taxation and
the prevention of fiscal evasion with respect to taxes on income and capital
gains and for the encouragement of mutual trade and investment: have
agreed as follows :
#$A%T&R I ' S#(%& () T$& #(!*&!TI(!
ARTIC! " # /ersonal scope # This Convention shall appl$ to persons who
are residents of one or both of the Contracting %tates&
ARTIC! ' # 4axes covered # )2 The existing taxes to which this
Convention shall appl$ are :
(a) in the case of India,*
(i) the income#tax including an$ surcharge thereon imposed under the
Income#tax Act, "+," (-. of "+,") /
(ii) the surtax imposed under the Companies (0rofits) %urtax Act,
"+,- (1 of "+,-) /
(hereinafter referred to as 2Indian tax3) /
(b) in the case of Mauritius, the income#tax (hereinafter referred to as
2Mauritius tax3)&
"2 This Convention shall also appl$ to an$ identical or substantiall$ similar
taxes which are imposed b$ either Contracting %tate after the date of
signature of the present Convention in addition to, or in place of, the
existing taxes referred to in paragraph ()) of this article&
-2 The competent authorities of the Contracting %tates shall notif$ to each
other an$ significant changes which are made in their respective taxation
laws&
#$A%T&R II ' +&)I!ITI(!S
ARTIC! . # General definitions # )2 4or the purposes of this Convention,
unless the context otherwise re5uires:
(a) the term 2India3 means the territor$ of India and includes the territorial
sea and air space above it as well as an$ other maritime 6one referred to
in the Territorial 7aters, Continental %helf, !xclusive !conomic 8one
and other Maritime 8ones Act, "+1, (Act 9o& :; of "+1,), in which
India has certain rights and to the extent that these rights can be
exercised therein as if such maritime 6one is a part of the territor$ of
India /
(b) the term 2Mauritius3 means all the territories, including all the islands,
which in accordance with the laws of Mauritius, constitute the %tate of
Mauritius and includes,
(i) the territorial sea of Mauritius / and
(ii) an$ area outside the territorial sea of Mauritius which in
accordance with international law has been or ma$ hereafter be
designated, under the laws of Mauritius concerning
the Continential %helf, as an area within which the rights of
Mauritius with respect to the sea bed and sub#soil and their natural
resources ma$ be exercised /
(c) the terms 2a Contracting %tate3 and 2the other Contracting %tate3
mean India or Mauritius as the context re5uires /
(d) the term 2tax3 means Indian tax or Mauritius tax as the context
re5uires, but shall not include an$ amount which is pa$able in respect of
an$ default or omission in relation to the taxes to which this Convention
applies or which represents a penalt$ imposed relating to those taxes /
(e) the term 2person3 includes an individual, a compan$ and an$ other
entit$, corporate or non#corporate, which is treated as a taxable unit
under the taxation laws in force in the respective Contracting %tates /
(f) the term 2compan$3 means an$ bod$ corporate or an$ entit$ which is
treated as a compan$ or a bod$ corporate under the taxation laws in
force in the respective Contracting %tates /
(g) the terms 2enterprise of a Contracting %tate3 and 2enterprise of the
other Contracting %tate3 mean respectivel$ an industrial, mining,
commercial, plantation or agricultural enterprise or similar underta<ing
carried on b$ a resident of a Contracting %tate and an industrial, mining,
commercial, plantation or agricultural enterprise or similar underta<ing
carried on b$ a resident of the other Contracting %tate /
(h) the term 2competent authorit$3 means in the case of India, the Central
Government in the Ministr$ of 4inance (=epartment of Revenue) or
their authorised representative/ and in the case of Mauritius, the
Commissioner of Income#tax or his authorised representative /
(i) the term 2national3 means an$ individual possessing the nationalit$ of
a Contracting %tate and an$ local person, partnership or association
deriving its status from the laws in force in the Contracting %tate /
(:) the term 2international traffic3 means an$ transport b$ a ship or aircraft
operated b$ an enterprise which has its place of effective management
in a Contracting %tate, except when the ship or aircraft is operated b$
the enterprise solel$ between places in the other Contracting %tate&
"2 In the application of the provisions of this Convention b$ a Contracting
%tate, an$ term not defined therein shall, unless the context otherwise
re5uires, have the meaning which it has under the laws in force of that
Contracting %tate relating to the areas which are the sub>ect of this
Convention&
ARTIC! - # Residents # )2 4or the purposes of this Convention, the term
2resident of a Contracting %tate3 means an$ person who, under the laws of
that %tate, is liable to taxation therein b$ reason of his domicile, residence,
place of management or an$ other criterion of similar nature& The terms
2resident of India3 and 2resident of Mauritius3 shall be construed
accordingl$&
"2 7here b$ reason of the provisions of paragraph ()), an individual is a
resident of both Contracting %tates, then his residential status for the
purposes of the Convention shall be determined in accordance with the
following rules :
(a) he shall be deemed to be a resident of the Contracting %tate in which
he has a permanent home available to him/ if he has a permanent home
available to him in both Contracting %tates, he shall be deemed to be a
resident of the Contracting %tate with which his personal and economic
relations are closer (hereinafter referred to as his 2centre of vital
interests3) /
(b) if the Contracting %tate in which he has his centre of vital interests
cannot be determined, or if he does not have a permanent home
available to him in either Contracting %tate, he shall be deemed to be a
resident of the Contracting %tate in which he has an habitual abode /
(c) if he has an habitual abode in both Contracting %tates or in neither of
them, he shall be deemed to be a resident of the Contracting %tate of
which he is a national /
(d) if he is a national of both Contracting %tates or of neither of them, the
competent authorities of the Contracting %tates shall settle the 5uestion
b$ mutual agreement&
-2 7here b$ reason of the provisions of paragraph ()), a person other than
an individual is a resident of both the Contracting %tates, then it shall be
deemed to be a resident of the Contracting %tate in which its place of
effective management is situated&
ARTIC! ? # /ermanent establishment # )2 4or the purposes of this
Convention, the term 2permanent establishment3 means a fixed place of
business through which the business of the enterprise is wholl$ or partl$
carried on&
"2 The term 2permanent establishment3 shall include*
(a) a place of management /
(b) a branch /
(c) an office /
(d) a factor$ /
(e) a wor<shop /
(f) a warehouse, in relation to a person providing storage facilities for
others /
(g) a mine, an oil or gas well, a 5uarr$ or an$ other place of extraction of
natural resources /
(h) a firm, plantation or other place where agricultural, forestr$, plantation
or related activities are carried on /
(i) a building site or construction or assembl$ pro>ect or supervisor$
activities in connection therewith, where such site, pro>ect or
supervisor$ activit$ continues for a period of more than nine months&
-2 9otwithstanding the preceding provisions of this article, the term
2permanent establishment3 shall be deemed not to include :
(a) the use of facilities solel$ for the purpose of storage or displa$ of
merchandise belonging to the enterprise /
(b) the maintenance of a stoc< of goods or merchandise belonging to the
enterprise solel$ for the purpose of storage or displa$ /
(c) the maintenance of a stoc< of goods or merchandise belonging to the
enterprise solel$ for the purpose of processing b$ another enterprise /
(d) the maintenance of a fixed place of business solel$ for the purpose of
purchasing goods or merchandise or for collecting information for the
enterprise /
(e) the maintenance of a fixed place of business solel$*
(i) for the purpose of advertising,
(ii) for the suppl$ of information,
(iii) for scientific research, or
(iv) for similar activities,
which have a preparator$ or auxiliar$ character for the enterprise&
,2 9otwithstanding the provisions of paragraphs ()) and (") of this article, a
person acting in a Contracting %tate for or on behalf of an enterprise of the
other Contracting %tate @other than an agent of an independent status to
whom the provisions of paragraph (;) appl$A shall be deemed to be a
permanent establishment of that enterprise in the first#mentioned %tate if :
(i) he has and habituall$ exercises in that first#mentioned %tate, an
authorit$ to conclude contracts in the name of the enterprise, unless his
activities are limited to the purchase of goods or merchandise for the
enterprise / or
(ii) he habituall$ maintains in that first#mentioned %tate a stoc< of goods
or merchandise belonging to the enterprise from which he regularl$
fulfils orders on behalf of the enterprise&
;2 An enterprise of a Contracting %tate shall not be deemed to have a
permanent establishment in the other Contracting %tate merel$ because it
carries on business in that other %tate through a bro<er, general commission
agent or an$ other agent of an independent status, where such persons are
acting in the ordinar$ course of their business& Bowever, when the activities
of such an agent are devoted exclusivel$ or almost exclusivel$ on behalf of
that enterprise, he will not be considered an agent of an independent status
within the meaning of this paragraph&
*2 The fact that a compan$, which is a resident of a Contracting %tate
controls or is controlled b$ a compan$ which is a resident of the other
Contracting %tate, or which carries on business in that other Contracting
%tate (whether through a permanent establishment or otherwise) shall not, of
itself, constitute either compan$ a permanent establishment of the other&
#$A%T&R III ' TA,ATI(! () I!#(M&
ARTIC! , # Income from immovable property # )2 Income from
immovable propert$ ma$ be taxed in the Contracting %tate in which such
propert$ is situated&
"2 The term 2immovable propert$3 shall be defined in accordance with the
law and usage of the Contracting %tate in which the propert$ is situated& The
term shall in an$ case include propert$ accessor$ to immovable propert$,
livestoc< and e5uipment used in agriculture and forestr$, rights to which the
provisions of general law respecting landed propert$ appl$, usufruct of
immovable propert$ and rights to variable or fixed pa$ments as
consideration for the wor<ing of, or the right to wor<, mineral deposits, oil#
wells, 5uarries and other places of extraction of natural resources, ships,
boats and aircraft shall not be regarded as immovable propert$&
-2 The provisions of paragraph ()) shall appl$ to income derived from the
direct use, letting, or use in an$ other form of immovable propert$&
,2 The provisions of paragraphs ()) and (-) shall also appl$ to the income
from immovable propert$ of an enterprise and to income from immovable
propert$ used for the performance of independent personal services&
ARTIC! 1 # <usiness profits # )2 The profits of an enterprise of
a Contracting %tate shall be taxable onl$ in that %tate unless the enterprise
carries on business in the other Contracting %tate through a permanent
establishment situated therein& If the enterprise carries on business as
aforesaid, the profits of the enterprise ma$ be taxed in the other %tate but
onl$ so much of them as is attributable to that permanent establishment&
"2 %ub>ect to the provisions of paragraph (-) of this article, where an
enterprise of a Contracting %tate carries on business in the other Contracting
%tate through a permanent establishment situated therein, there shall in each
Contracting %tate be attributed to that permanent establishment the profits
which it might be expected to ma<e if it were a distinct and separate
enterprise engaged in the same or similar activities under the same or similar
conditions and dealing wholl$ independentl$ with the enterprise of which it
is a permanent establishment& 7here the correct amount of profits
attributable to a permanent establishment cannot be readil$ determined or
the determination thereof presents exceptional difficulties, the profits
attributable to the permanent establishment ma$ be estimated on a
reasonable basis&
-2 In determining the profits of a permanent establishment, there shall be
allowed as deductions expenses which are incurred for the purposes of the
business of the permanent establishment including executive and general
administrative expenses so incurred, whether in the %tate in which the
permanent establishment is situated or elsewhere&
,2 9o profits shall be attributed to a permanent establishment b$ reason of
the mere purchase b$ that permanent establishment of goods or merchandise
for the enterprise&
;2 4or the purposes of the preceding paragraphs, the profits to be attributed
to the permanent establishment shall be determined b$ the same method
$ear b$ $ear unless there is good and sufficient reason to the contrar$&
*2 7here profits include items of income which are dealt with separatel$ in
other articles of this Convention, then the provisions of those articles shall
not be affected b$ the provisions of this article&
ARTIC! : # Shipping and air transport # )2 0rofits from the operation of
ships or aircraft in international traffic shall be taxable onl$ in
the Contracting %tate in which the place of effective management of the
enterprise is situated&
"2 If the place of effective management of a shipping enterprise is aboard a
ship, then it shall be deemed to be situated in the Contracting %tate in which
the home harbour of the ship is situated or, if there is no such home harbour,
in the Contracting %tate of which the operator of the ship is resident&
-2 The provisions of paragraph ()) of this article shall also appl$ to profits
from the participation in a pool, a >oint business or an international operating
agenc$&
,2 4or the purposes of paragraph ()), interest on funds connected with the
operation of ships or aircraft in international traffic shall be regarded as
profits from the operation of such ships or aircraft, and the provisions of
Article "" shall not appl$ in relation to such interest&
;2 The term 2operation of ships or aircraft3 shall mean business of
transportation of persons, mail, livestoc< or goods, carried on b$ the owners
or lessees or charterers of the ships or aircraft, including the sale of tic<ets
for such transportation on behalf of other enterprises, the incidental lease of
ships or aircraft and an$ other activit$ directl$ connected with such
transportation&
ARTIC! + # !ssociated enterprises # 7here
(a) an enterprise of a Contracting %tate participates, directl$ or indirectl$,
in the management, control or capital of an enterprise of the other
Contracting %tate, or
(b) the same persons participate, directl$ or indirectl$, in the management,
control or capital of an enterprise of a Contracting %tate and an
enterprise of the other Contracting %tate,
and in either case conditions are made or imposed between the two
enterprises in their commercial or financial relations which differ from those
which would be made between independent enterprises, then an$ profits
which would, but for those conditions, have accrued to one of the
enterprises, but, b$ reason of those conditions have not so accrued, ma$ be
included in the profits of that enterprise and taxed accordingl$&
ARTIC! "; # 8ividends # )2 =ividends paid b$ a compan$ which is a
resident of a Contracting %tate to a resident of the other Contracting %tate
ma$ be taxed in that other %tate&
"2 Bowever, such dividends ma$ also be taxed in the Contracting %tate of
which the compan$ pa$ing the dividends is a resident and according to the
laws of that %tate, but if the recipient is the beneficial owner of the
dividends the tax so charged shall not exceed*
(a) five per cent of the gross amount of the dividends if the beneficial
owner is a compan$ which holds directl$ at least "; per cent of the
capital of the compan$ pa$ing the dividends /
(b) fifteen per cent of the gross amount of the dividends in all other cases&
This paragraph shall not affect the taxation of the compan$ in respect of the
profits out of which the dividends are paid&
-2 9otwithstanding the provisions of paragraph ("), dividends paid b$ a
compan$ which is a resident of Mauritius to a resident of India ma$ be taxed
in Mauritius and according to the laws of Mauritius, as long as dividends
paid b$ companies which are residents of Mauritius are allowed as
deductible expenses for determining their taxable profits& Bowever, the tax
charged shall not exceed the rate of the Mauritius tax on profit of the
compan$ pa$ing the dividends&
,2 The term 2dividends3 as used in this Article means income from shares or
other rights, not being debt#claims, participating in profits, as well as
income from other corporate rights which is sub>ected to the same taxation
treatment as income from shares b$ the laws of the Contracting %tate of
which the compan$ ma<ing the distribution is a resident&
;2 The provisions of paragraphs ()), (") and (-) shall not appl$ if the
beneficial owner of the dividends, being a resident of the Contracting %tate,
carries on business in the other Contracting %tate of which the compan$
pa$ing the dividends is a resident, through a permanent establishment
situated therein or performs in that other %tate independent personal services
from a fixed base situated therein and the holding in respect of which the
dividends are paid is effectivel$ connected with such permanent
establishment or fixed base& In such a case, the provisions of article 1 or
article "-, as the case ma$ be, shall appl$&
*2 7here a compan$ which is a resident of a Contracting %tate derives
profits or income from the other Contracting %tate, that other %tate ma$ not
impose an$ tax on the dividends paid b$ the compan$, except insofar as such
dividends are paid to a resident of that other %tate or insofar as the holding
in respect of which the dividends are paid is effectivel$ connected with a
permanent establishment or a fixed base situated in that other %tate nor
sub>ect the compan$Cs undistributed profits to a tax on the compan$Cs
undistributed profits, even if the dividends paid or the undistributed profits
consist wholl$ or partl$ of profits or income arising in such other %tate&
ARTIC! "" # Interest # )2 Interest arising in a Contracting %tate and paid to
a resident of the other Contracting %tate ma$ be taxed in that other %tate&
"2 Bowever, sub>ect to the provisions of paragraphs (-) and (,) of this
article, such interest ma$ also be taxed in the Contracting %tate in which it
arises and according to the laws of that %tate&
-2 Interest arising in a Contracting %tate shall be exempt from tax in that
%tate provided it is derived and beneficiall$ owned b$ :
(a) the Government or a local authorit$ of the other Contracting %tate /
(b) an$ agenc$ or entit$ created or organised b$ the Government of the
other Contracting %tate / or
(c) an$ ban< carr$ing on a bona fide ban<ing business which is a resident
of the other Contracting %tate&
,2 Interest arising in a Contracting %tate shall be exempt from tax in that
Contracting %tate to the extent approved b$ the Government of that %tate if
it is derived and beneficiall$ owned b$ an$ person @other than a person
referred to in paragraph (-)A who is a resident of the other Contracting %tate
provided that the transaction giving rise to the debt#claim has been approved
in this regard b$ the Government of the first#mentioned Contracting %tate&
;2 The term 2interest3 as used in this Article means income from debt#claims
of ever$ <ind, whether or not secured b$ mortgage, and whether or not
carr$ing a right to participate in the debtorCs profits, and, in particular,
income from Government securities and income from bonds or debentures,
including premiums and pri6es attaching to such securities, bonds or
debentures& 0enalt$ charges for late pa$ment shall not be regarded as
interest for the purpose of this article&
*2 The provisions of paragraphs ()), ("), (-) and (-) shall not appl$ if the
recipient of the interest, being a resident of a Contracting %tate, carries on
business in the other Contracting %tate in which the interest arises, through a
permanent establishment situated therein, or performs in that other %tate
independent personal services from a fixed base situated therein, and the
debt#claim in respect of which the interest is paid is effectivel$ connected
with such permanent establishment or fixed base& In such case, the
provisions of article 1 or article "-, as the case ma$ be, shall appl$&
02 Interest shall be deemed to arise in a Contracting %tate when the pa$er is
that Contracting %tate itself, a political sub#division, a local authorit$ or a
resident of that %tate& 7here, however, the person pa$ing the interest,
whether he is a resident of a Contracting %tate or not, has in a Contracting
%tate a permanent establishment in connection with which the indebtedness
on which the interest is paid was incurred, and such interest is borne b$ that
permanent establishment, then such interest shall be deemed to arise in the
Contracting %tate in which the permanent establishment is situated&
#2 7here, b$ reason of a special relationship between the pa$er and the
recipient or between both of them and some other person, the amount of the
interest paid, having regard to the debt#claim for which it is paid, exceeds
the amount which would have been agreed upon b$ the pa$er and the
recipient in the absence of such relationship, the provisions of this article
shall appl$ onl$ to the last#mentioned amount& In that case, the excess part
of the pa$ments shall remain taxable according to the law of each
Contracting %tate, due regard being had to the other provisions of this
Convention&
ARTIC! "' # Royalties # )2 Ro$alties arising in a Contracting %tate and
paid to a resident of the other Contracting %tate ma$ be taxed in that other
%tate&
"2 Bowever, such ro$alties ma$ also be taxed in the Contracting %tate in
which the$ arise, and according to the law of that %tate, but the tax so
charged shall not exceed "? per cent of the gross amount of the ro$alties&
-2 The term 2ro$alties3 as used in this Article means pa$ments of an$ <ind
received as a consideration for the use of, or the right to use, an$ cop$right
of literar$, artistic or scientific wor< (including cinematograph films, and
films or tapes for radio or television broadcasting), an$ patent, trade mar<,
design or model, plan, secret formula or process or for the use of, or the
right to use, industrial, commercial or scientific e5uipment, or for
information concerning industrial, commercial or scientific experience&
,2 The provisions of paragraphs ()) and (") shall not appl$ if the recipient of
the ro$alties, being a resident of a Contracting %tate carries on business in
the other Contracting %tate in which the ro$alties arise, through a permanent
establishment situated therein, or performs in that other %tate independent
personal services from a fixed base situated therein, and the right or propert$
in respect of which the ro$alties are paid is effectivel$ connected with such
permanent establishment or fixed base& In such a case, the provisions of
article 1 or article "-, as the case ma$ be, shall appl$&
;2 Ro$alties shall be deemed to arise in a Contracting %tate when the pa$er
is that Contracting %tate itself, a political sub#division, a local authorit$ or a
resident of that %tate, where, however, the person pa$ing the ro$alties
whether he is a resident of a Contracting %tate, or not, has in a Contracting
%tate a permanent establishment in connection with which the liabilit$ to
pa$ the ro$alties was incurred, and such ro$alties are borne b$ such
permanent establishment, then such ro$alties shall be deemed to arise in the
Contracting %tate in which the permanent establishment is situated&
*2 7here, b$ reason of a special relationship between the pa$er and the
recipient or between both of them and some other person, the amount of
ro$alties paid, having regard to the use, right or information for which the$
are paid, exceeds the amount which would have been agreed upon b$ the
pa$er and the recipient in the absence of such relationship, the provisions of
this article shall appl$ onl$ to the last#mentioned amount& In that case, the
excess part of the pa$ments shall remain taxable according to the laws of
each Contracting %tate, due regard being had to the other provisions of this
Convention&
ARTIC! ". # Capital gains # )2 Gains from the alienation of immovable
propert$, as defined in paragraph (") of article ,, ma$ be taxed in the
Contracting %tate in which such propert$ is situated&
"2 Gains from the alienation of movable propert$ forming part of the
business propert$ of a permanent establishment which an enterprise of a
Contracting %tate has in the other Contracting %tate or of movable propert$
pertaining to a fixed base available to a resident of a Contracting %tate in the
other Contracting %tate for the purpose of performing independent personal
services, including such gains from the alienation of such a permanent
establishment (alone or together with the whole enterprise) or of such a
fixed base, ma$ be taxed in that other %tate&
-2 9otwithstanding the provisions of paragraph (") of this article, gains from
the alienation of ships and aircraft operated in international traffic and
movable propert$ pertaining to the operation of such ships and aircraft, shall
be taxable onl$ in the Contracting %tate in which the place of effective
management of the enterprise is situated&
,2 Gains derived b$ a resident of a Contracting %tate from the alienation of
an$ propert$ other than those mentioned in paragraphs ()), (") and (-) of
this article shall be taxable onl$ in that %tate&
;2 4or the purposes of this article, the term 2alienation3 means the sale,
exchange, transfer, or relin5uishment of the propert$ or the extinguishment
of an$ rights therein or the compulsor$ ac5uisition thereof under an$ law in
force in the respective Contracting %tates&
ARTIC! "- # Independent personal services # )2 Income derived b$ a
resident of a Contracting %tate in respect of professional services or other
independent activities of a similar character shall be taxable onl$ in that
%tate unless he has a fixed base regularl$ available to him in the other
Contracting %tate for the purpose of performing his activities& If he has such
a fixed base, the income ma$ be taxed in the other Contracting %tate but
onl$ so such of it as is attributable to that fixed base&
"2 The term 2professional services3 includes especiall$ independent
scientific, literar$, artistic, educational or teaching activities, as well as the
independent activities of ph$sicians, law$ers, engineers, architects, dentists
and accountants&
ARTIC! "? # 8ependent personal services # )2 %ub>ect to the provisions of
articles ",, "1, ":, "+, '; and '", salaries, wages and other similar
remuneration derived b$ a resident of a Contracting %tate in respect of an
emplo$ment shall be taxable onl$ in that %tate unless the emplo$ment is
exercised in the other Contracting %tate& If the emplo$ment is so exercised,
such remuneration as is derived therefrom ma$ be taxed in that other
Contracting %tate&
"2 9otwithstanding the provisions of paragraph ()) of this article,
remuneration derived b$ a resident of a Contracting %tate in respect of an
emplo$ment exercised in the other Contracting %tate shall be taxable onl$ in
the first mentioned %tate, if*
(a) the recipient is present in the other %tate for a period or periods not
exceeding in the aggregate ":. da$s in the relevant 2previous $ear3 or
2$ear of income3, and
(b) the remuneration is paid b$, or on behalf of, an emplo$er who is not a
resident of the other %tate, and
(c) the remuneration is not borne b$ a permanent establishment or a fixed
base which the emplo$er has in the other %tate&
-2 9otwithstanding the preceding provisions of this article, remuneration in
respect of an emplo$ment exercised aboard a ship or aircraft in international
traffic, ma$ be taxed onl$ in the Contracting %tate in which the place of
effective management of the enterprise is situated&
ARTIC! ", # 8irectors= fees # =irectorsC fees and other similar pa$ments
derived b$ a resident of a Contracting %tate in his capacit$ as a member of
the board of directors of a compan$ which is a resident of the other
Contracting %tate ma$ be taxed in that other Contracting %tate&
ARTIC! "1 # !rtistes and athletes # )2 9otwithstanding the provisions of
articles "- and "?, income derived b$ public entertainers such as theatre,
motion picture, radio or television artistes and musicians, and b$ athletes,
from their personal activities as such ma$ be taxed in the Contracting %tate
in which these activities are exercised&
"2 7here income is derived from personal activities exercised b$ an
entertainer or an athlete in his capacit$ as such, and accrues not to the
entertainer or athlete himself but to another person, that income ma$,
notwithstanding the provisions of articles 1, "- and "?, be taxed in the %tate
in which the activities of the entertainer or athlete are exercised&
-2 9otwithstanding the provisions of paragraph ()) of this article, income
derived b$ an entertainer or an athlete who is a resident of a Contracting
%tate from his personal activities as such exercised in the other Contracting
%tate, shall be taxable onl$ in the first#mentioned Contracting %tate, if those
activities in the other Contracting %tate, are supported wholl$ or
substantiall$ from the public funds of the first#mentioned Contracting %tate,
including an$ of its political sub#divisions or local authorities&
,2 9otwithstanding the provisions of paragraph (") of this article and articles
1, "- and "?, where income is derived from personal activities exercised b$
an entertainer or an athlete in his capacit$ as such in a Contracting %tate and
accrues not to the entertainer or athlete himself but to another person, that
income shall be taxable onl$ in the Contracting %tate, if that other person is
supported wholl$ or substantiall$ from the public funds of that other
Contracting %tate, including an$ of its political sub#divisions or local
authorities&
ARTIC! ": # Governmental functions # )2 Remuneration, other than
pension, paid b$ the Government of a Contracting %tate, to an individual
who is a national of that %tate in respect of services rendered to that %tate
shall be taxable onl$ in that %tate&
"2 An$ pension paid b$ the Government of a Contracting %tate to an
individual who is a national of that %tate, shall be taxable onl$ in that
Contracting %tate&
-2 The provisions of paragraphs ()) and (") of this article shall not appl$ to
remuneration and pensions in respect of services rendered in connection
with an$ business carried on b$ the Government of either of the Contracting
%tates for the purpose of profit&
,2 The provisions of paragraph ()) of this article shall li<ewise appl$ in
respect of remuneration paid under a development assistance programme of
a Contracting %tate, out of funds supplied b$ that %tate, to a specialist or
volunteer seconded to the other Contracting %tate with the consent of that
other %tate&
;2 4or the purposes of this article, the term 2Government3 shall include an$
%tate Government or local or statutor$ authorit$ of either Contracting %tate
and, in particular, the Reserve Dan< of India and the Dan< of Mauritius&
ARTIC! "+ # %on(Government pensions and annuities # )2 An$ pension,
other than a pension referred to in article ":, or an$ annuit$ derived b$ a
resident of a Contracting %tate from sources within the other Contracting
%tate shall be taxed onl$ in the first#mentioned Contracting %tate&
"2 The term 2pension3 means a periodic pa$ment made in consideration of
past services or b$ wa$ of compensation for in>uries received in the course
of performance of services&
-2 The term 2annuit$3 means a stated sum pa$able periodicall$ at stated
times during life or during a specified or ascertainable period of time, under
an obligation to ma<e the pa$ments in return for ade5uate and full
consideration in mone$ or mone$Cs worth&
ARTIC! '; # Students and apprentices # )2 A student or business
apprentice who is or was a resident of one of the Contracting %tates
immediatel$ before visiting the other Contracting %tate and who is present
in that other Contracting %tate solel$ for the purpose of his education or
training, shall be exempt from tax in that other Contracting %tate on*
(a) pa$ments made to him from sources outside that other Contracting
%tate for the purposes of his maintenance, education or training, and
(b) remuneration from emplo$ment in that other Contracting %tate, in an
amount not exceeding Rs& "?,;;; in Indian currenc$ or its e5uivalent in
Mauritius rupees at the parit$ rate of exchange during an$ 2previous
$ear3 or 2$ear of income3, as the case ma$ be, provided that such
emplo$ment is directl$ related to his studies or is underta<en for the
purpose of his maintenance&
"2 The benefits of this article shall extend onl$ for such period of time as
ma$ be reasonable or customaril$ re5uired to complete the education or
training underta<en, but in no event shall an$ individual have the benefits of
this article for more than five consecutive $ears from the date of his first
arrival in that other Contracting %tate&
ARTIC! '" # /rofessors teachers and research scholars # )2 A professor,
teacher and research scholar who is or was a resident of one of the
Contracting %tates immediatel$ before visiting the other Contracting %tate at
the invitation of that other Contracting %tate or of a universit$, college,
school or other approved institution in that other Contracting %tate for the
purpose of teaching or engaging in research, or both, at the universit$,
college, school or other approved institution, shall be exempt from tax in
that other Contracting %tate on an$ remuneration for such teaching or
research for a period not exceeding two $ears from the date of his arrival in
that other Contracting %tate&
"2 This article shall not appl$ to income from research if the research is
underta<en primaril$ for the private benefit of a specific person or persons&
-2 4or the purposes of this article and article '; an individual shall be
deemed to be resident of a Contracting %tate if he is a resident in that
Contracting %tate in the 2previous $ear3 or the 2$ear of income3, as the case
ma$ be, in which he visits the other Contracting %tate or in the immediatel$
preceding 2previous $ear3 or the 2$ear of income3&
,2 4or the purpose of paragraph ()), 2approved institution3 means an
institution which has been approved in this regard b$ the competent
authorit$ of the concerned Contracting %tate&
ARTIC! '' # 6ther income # )2 %ub>ect to the provisions of paragraph (")
of this article, items of income of a resident of a Contracting %tate, wherever
arising, which are not expressl$ dealt with in the foregoing articles of this
Convention, shall be taxable onl$ in that Contracting %tate&
"2 The provisions of paragraph ()) shall not appl$ to income, other than
income from immovable propert$ as defined in paragraph (") of article ,, if
the recipient of such income, being a resident of a Contracting %tate, carries
on business in the other Contracting %tate through a permanent
establishment situated therein, or performs in that other %tate independent
personal services from a fixed base situated therein and the right or propert$
in respect of which the income is paid is effectivel$ connected with such
permanent establishment or fixed base& In such case, the provisions of article
1 or article "-, as the case ma$ be, shall appl$&
#$A%T&R I* ' M&T$(+S )(R &-IMI!ATI(! () +(U.-&
TA,ATI(!
ARTIC! '. # 3limination of double taxation # )2 The laws in force in
either of the Contracting %tates shall continue to govern the taxation of
income in the respective Contracting %tates except where provisions to the
contrar$ are made in this Convention&
"2 (a) The amount of Mauritius tax pa$able, under the laws of Mauritius and
in accordance with the provisions of this Convention, whether directl$ or b$
deduction, b$ a resident of India, in respect of profits or income arising in
Mauritius, which has been sub>ected to tax both in India and in Mauritius,
shall be allowed as a credit against the Indian tax pa$able in respect of such
profits or income provided that such credit shall not exceed the Indian tax
(as computed before allowing an$ such credit) which is appropriate to the
profits or income arising in Mauritius& 4urther, where such resident is a
compan$ b$ which surtax is pa$able in India, the credit aforesaid shall be
allowed in the first instance against income#tax pa$able b$ the compan$ in
India and as to the balance, if an$, against surtax pa$able b$ it in India&
(b) In the case of a dividend paid b$ a compan$ which is a resident of
Mauritius to a compan$ which is a resident of India and which owns at least
"; per cent of the shares of the compan$ pa$ing the dividend, the credit
shall ta<e into account @in addition to an$ Mauritius tax for which credit
ma$ be allowed under the provisions of sub#paragraph (a) of this paragraphA
the Mauritius tax pa$able b$ the compan$ in respect of the profits out of
which such dividend is paid&
-2 4or the purposes of the credit referred to in paragraph (") the term
2Mauritius tax pa$able3 shall be deemed to include an$ amount which
would have been pa$able as Mauritius tax for an$ $ear but for an exemption
or reduction of tax granted for that $ear or an$ part thereof under :
(i) sections .., .-, .-A and .-D of the Mauritius Income#tax Act, "+1-
(-" of "+1-) /
(ii) an$ other provision which ma$ subse5uentl$ be made granting an
exemption or reduction of tax which the competent authorities of the
Contracting %tates agree to be for the purposes of economic
development&
,2 (a) The amount of Indian tax pa$able under the laws of India and in
accordance with the provisions of this Convention, whether directl$ or b$
deduction, b$ a resident of Mauritius, in respect of profits or income arising
in India, which has been sub>ected to tax both in India and Mauritius shall
be allowed as a credit against Mauritius tax pa$able in respect of such
profits or income provided that such credit shall not exceed the Mauritius
tax (as computed before allowing an$ such credit) is appropriate to the
profits or income arising in India&
(b) In the case of a dividend paid b$ a compan$ which is a resident of India
to a compan$ which is a resident of Mauritius and which owns at least ";
per cent of the shares of the compan$ pa$ing the dividend, the credit shall
ta<e into account @in addition to an$ Indian tax for which credit ma$ be
allowed under the provisions of sub#paragraph (a) of this paragraphA the
Indian tax pa$able b$ the compan$ in respect of the profits out of which
such dividend is paid&
;2 4or the purposes of the credit referred to in paragraph (,), the term
2Indian tax pa$able3 shall be deemed to include an$ amount b$ which tax
has been reduced b$ the special incentive measures under*
(i) section ";(,), ";(,!), ";(*)(viia), ";();)(iv), ";("#), ";A, .'A, ..A,
.?D, ?-!, :;BB, :;BBA, :;#I or :; of the Income#tax Act, "+," (-.
of "+,")/
(ii) an$ other provision which ma$ subse5uentl$ be enacted granting a
reduction of tax which the competent authorities of the Contracting
%tates agree to be for the purposes of economic development&
*2 7here under this Convention a resident of a Contracting %tate is exempt
from tax in that Contracting %tate in respect of income derived from the
other Contracting %tate, then the first#mentioned Contracting %tate ma$, in
calculating tax on the remaining income of that person, appl$ the rate of tax
which would have been applicable if the income exempted from tax in
accordance with this Convention had not been so exempted&
#$A%T&R * ' S%&#IA- %R(*ISI(!S
ARTIC! '- # %on(discrimination # )2 The nationals of a Contracting %tate
shall not be sub>ected in the other Contracting %tate to an$ taxation or an$
re5uirement connected therewith which is other or more burdensome than
the taxation and connected re5uirements to which nationals of that other
%tate in the same circumstances are or ma$ be sub>ected&
"2 The taxation on a permanent establishment which an enterprise of a
Contracting %tate has in the other Contracting %tate shall not be
less favourabl$ levied in that other %tate than the taxation levied on
enterprises of that other %tate carr$ing on the same activities in the same
circumstances&
-2 9othing contained in this Article shall be construed as obliging a
Contracting %tate to grant persons not resident in that %tate an$ personal
allowances, reliefs, reductions and deductions for taxation purposes which
are b$ law available onl$ to persons who are so resident&
,2 !nterprises of a Contracting %tate, the capital of which is wholl$ or partl$
owned or controlled, directl$ or indirectl$, b$ one or more residents of the
other Contracting %tate, shall not be sub>ected in the first#mentioned
Contracting %tate to an$ taxation or an$ re5uirement connected therewith
which is other or more burdensome than the taxation and connected
re5uirements to which other similar enterprises of that first#mentioned %tate
are or ma$ be sub>ected in the same circumstances&
;2 In this article, the term 2taxation3 means taxes which are the sub>ect of
this Convention&
ARTIC! '? # Mutual agreement procedure # )2 7here a resident of a
Contracting %tate considers that the actions of one or both of the Contracting
%tates result or will result for him in taxation not in accordance with this
Convention, he ma$, notwithstanding the remedies provided b$ the national
laws of those %tates, present his case to the competent authorit$ of the
Contracting %tate of which he is a resident& This case must be presented
within three $ears of the date of receipt of notice of the action which gives
rise to taxation not in accordance with the Convention&
"2 The competent authorit$ shall endeavour, if the ob>ection appears to it to
be >ustified and if it is not itself able to arrive at an appropriate solution, to
resolve the case b$ mutual agreement with the competent authorit$ of the
other Contracting %tate, with a view to the avoidance of taxation not in
accordance with the Convention& An$ agreement reached shall be
implemented notwithstanding an$ time limits in the laws of the Contracting
%tates&
-2 The competent authorities of the Contracting %tates shall endeavour to
resolve b$ mutual agreement an$ difficulties or doubts arising as to the
interpretation or application of the Convention& The$ ma$ also consult
together for the elimination of double taxation in cases not provided for in
the Convention&
,2 The competent authorities of the Contracting %tates ma$ communicate
with each other directl$ for the purpose of reaching an agreement in the
sense of the preceding paragraphs& 7hen it seems advisable in order to
reach agreement to have an oral exchange of opinions, such exchange ma$
ta<e place through a Commission consisting of representatives of the
competent authorities of the Contracting %tates&
ARTIC! ', # 3xchange of information or document # )2 The competent
authorities of the Contracting %tates shall exchange such information or
document as is necessar$ for carr$ing out the provisions of this Convention
or for prevention of evasion of taxes which are the sub>ect of this
Convention& An$ information or document so exchanged shall be treated as
secret but ma$ be disclosed to persons (including courts or other authorities)
concerned with the assessment, collection, enforcement, investigation or
prosecution in respect of the taxes which are the sub>ect of this Convention,
or to persons with respect to whom the information or document relates&
"2 The exchange of information or documents shall be either on a routine
basis or on re5uest with reference to particular cases or both& The competent
authorities of the Contracting %tates shall agree from time to time on the list
of the information or documents which shall be furnished on a routine basis&
-2 The provisions of paragraph ()) shall not be construed so as to impose on
a Contracting %tate the obligation*
(a) to carr$ out administrative measures at variance with the laws or
administrative practice of that or of the other Contracting %tate /
(b) to suppl$ information or documents which are not obtainable under the
laws or in the normal course of the administration of that or of the other
Contracting %tate /
(c) to suppl$ information or documents which would disclose an$ trade,
business, industrial, commercial or professional secret or trade process
or information the disclosure of which would be contrar$ to public
polic$&
ARTIC! '1 # 8iplomatic and consular activities # 9othing in this
Convention shall affect the fiscal privileges of diplomatic or consular
officials under the general rules of international law or under the provisions
of special agreements&
#$A%T&R *I ' )I!A- %R(*ISI(!S
ARTIC! ': # 3ntry into force # !ach of the Contracting %tate shall notif$
to the other completion of the procedures re5uired b$ its law for the bringing
into force of this Convention& The Convention shall enter into force on the
date of the later of these notifications and shall thereupon have effect*
(a) in India, in respect of income and capital gains assessable for an$
assessment $ear commencing on or after "st April, "+:. /
(b) in Mauritius, in respect of income and capital gains assessable for an$
assessment $ear commencing on or after "st Eul$, "+:.&
ARTIC! '+ # 4ermination # This Convention shall remain in force
indefinitel$ but either of the Contracting %tates ma$, on or before the
thirtieth da$ of Eune in an$ calendar $ear beginning after the expiration of a
period of five $ears from the date of its entr$ into force, give the other
Contracting %tate through diplomatic channels, written notice of termination
and, in such event, this Convention shall cease to have effect*
(a) in India, in respect of income and capital gains assessable for the
assessment $ear commencing on "st da$ of April in the second calendar
$ear next following the calendar $ear in which the notice is given, and
subse5uent $ears /
(b) in Mauritius, in respect of income and capital gains assessable for the
assessment $ear commencing on "st da$ of Eul$ in the second calendar
$ear next following the calendar $ear in which the notice is given, and
subse5uent $ears&
In witness whereof the undersigned, being dul$ authorised thereto, have
signed the present Convention&
=one on this '-th da$ of August, "+:' at 0ort ouis on two original copies
each in Bindi and !nglish languages, both the texts being e5uall$ authentic&
In case of divergence between the two texts, the !nglish text shall be the
operative one&
FF FF FF
#larification regarding agreement for avoidance of double taxation
wit Mauritius
/. A Convention for the avoidance of double taxation and prevention of
fiscal evasion with respect to taxes of income and capital gains was entered
into between the Government of India and the Government of Mauritius and
was notified on ,#"'#"+:.& In respect of India, the Convention applies from
the assessment $ear "+:.#:- and onwards&
2. Article ". of the Convention deals with taxation of capital gains and it has
five paragraphs& The first paragraph gives the right of taxation of capital
gains on the alienation of immovable propert$ to the countr$ in which the
propert$ is situated& The second and third paragraphs deal with right of
taxation of capital gains on the alienation of movable propert$ lin<ed with
business or professional enterprises and ships and aircrafts&
0. 0aragraph - deals with taxation of capital gains arising from the
alienation of an$ propert$ other than those mentioned in the preceding
paragraphs and gives the right of taxation of capital gains onl$ to that %tate
of which the person deriving the capital gains is a resident& In terms of
paragraph -, capital gains derived b$ a resident of Mauritius b$ alienation of
shares of companies shall be taxable onl$ in Mauritius according to
Mauritius tax law& Therefore, an$ resident of Mauritius deriving income
from alienation of shares of Indian companies will be liable to capital gains
tax onl$ in Mauritius as per Mauritius tax law and will not have an$ capital
gains tax liabilit$ in India&
1. 0aragraph ? defines GalienationC to mean the sale, exchange, transfer or
relin5uishment of the propert$ or the extinguishment of an$ rights in it or its
compulsor$ ac5uisition under an$ law in force in India or in Mauritius&
#ircular " %o2 *#" dated -'(-()&&,2
2U+I#IA- A!A-3SIS
See Companies Incorporated in Mauritius In re @"++,A :+ Taxman "'?
(AAR # 9ew =elhi)H8>?M< Mauritius Investment Company v& CI4 @"++1A
+- Taxman '": (AAR # 9ew =elhi)H8r2 Ra:ni@ant R2 <hatt v& CI4 @"++,A :+
Taxman :' (AAR # 9ew =elhi)&