Notification:
54(E)
Section(s) Referred:
s. 90 ,s. 24A ,s. 44A
Statute:
INCOME TAX
Date of Issue:
19/1/2001
Notification No. S. O. 54(E), dated, 19th January, 2001.
Whereas the Agreement between the Government of the Republic of India and
the
Kingdom of Belgium for the avoidance of double taxation and the prevention of fiscal
evasion with respect to taxes on income came into force on the 1st day of October, 1997,
after the notification by both the Contracting States to each other of the completion of the
procedures required under their laws for bringing into force the said agreement ;
And whereas the Central Government in exercise of the powers conferred
by section 90
of the Income-tax Act, 1961 (43 of 1961), section 24A of the Companies (Profits) Surtax
Act, 1964 (7 of 1964) and section 44A of the Wealth-tax Act, 1957 (27 of 1957), had
directed that all the provisions of the said Agreement annexed to the notification of the
Government of India in the Ministry of Finance. (Department of Revenue) (Foreign Tax
Division) No. G. S. R. 632(E), dated the 31st October, 1997, shall be given effect to in
the Union of India;
And whereas paragraph 1 of the Protocol dated the 26th April, 1993, to
the aforesaid
agreement, provides that if after the 1st day of January, 1990, under any Convention or
Agreement between India and a third State being a member of the Organisation for
Economic Co-operation and Development, India should limit its taxation on royalties or
fees for technical services to a rate lower or a scope more restricted than the rate or scope
provided for in the present agreement on the said items of income, then, as from the date
on which the Agreement between India and Belgium or the relevant Indian Convention or
Agreement becomes effective ; whichever date is later, the same rate or scope as
provided for in that Convention or Agreement on the said items of income shall also
apply under this agreement ;
And whereas in the Convention between India and Sweden which became effective
on
the 1st April, 1998, in the case of India, and on the 1st January, 1998, in the case of
Sweden, which state is a member of the Organisation for Economic Co-operation and
Development, the Government of India has limited the taxation at source on royalties and
fees for technical services to a rate lower and a scope more restricted than that provided
in the Agreement between India and Belgium on the said items of income ;
Now, therefore, in exercise of the powers conferred by section 90 of the
Income-tax Act,
1961 (43 of 1961), the Central Government hereby directs that the following
modifications shall be made in the Agreement notified by the said notification which are
necessary for implementing the aforesaid Agreement between India and Belgium, namely
:---
I. With effect from the 1st April, 1998, in India and, with effect from
the 1st January,
1998, in Belgium for the existing paragraph (2) of article 12 relating to "royalties and
fees for technical services", the following paragraph shall be substituted, namely :
"2. However, such royalties and fees for technical services may also
be taxed in the
Contracting State in which they arise and according to the laws of that State, but if the
beneficial owner of the royalties or fees for technical services is a resident of the other
Contracting State, the tax so charged shall not exceed 10 per cent. of the gross amount of
the royalties or fees for technical services."
II. With effect from the 1st April, 1998, in India and with effect from
the 1st January,
1998, in Belgium for the existing sub-paragraph (a) of paragraph 3 of article 12 relating
to "royalties and fees for technical services", the following sub-paragraph shall be
substituted, namely :
"(a) The term "royalties" as used in this article means
payments of any kind received as a
consideration for the use of, or the right to use, any copyright of literary, artistic or
scientific work including cinematograph films, any patent, trade mark, design or model,
plant, secret formula or process, or for information concerning industrial, commercial or
scientific experience.".
[Notification No. 20/F. No. 505/2/89-FTD]