SECTION 90 OF THE INCOME-TAX ACT, 1961 - DOUBLE TAXATION AGREEMENT - AGREEMENT FOR AVOIDANCE OF DOUBLE TAXATION AND PREVENTION OF FISCAL EVASION WITH FOREIGN COUNTRIES – AUSTRALIA – AMENDMENT IN NOTIFICATION NO. GSR 60(E), DATED 22-1-1992
NOTIFICATION NO.74/2013 [F.NO.503/1/2009-FTD-II] SO 2820(E), DATED 20-9-2013
Whereas the annexed Protocol amending the Agreement between the Government of the Republic of India and the Government of Australia for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income (hereinafter referred to as "Protocol") signed on the 16th day of December, 2011 shall enter into force on the 2nd day of April, 2013, being the date of the later of the notifications after completion of the procedures as required by the laws of the respective countries for the entry into force of the Protocol, in accordance with the provisions of Article 7 of the said Protocol.
Now, therefore, in exercise of the powers conferred by sub-section (1) of section 90 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby directs that all the provisions of the Protocol annexed hereto shall be given effect to and shall be deemed to have been given effect to in the Union of India in accordance with Article 7 of the said Protocol, namely:-
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(i
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in respect of
Articles 1, 2 and 3 of the said Protocol, for the Financial Year 2014-15 and
subsequent financial years;
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(ii
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in respect of
Articles 4 and 5 of the said Protocol, from the 2nd day of April, 2013; and
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(iii
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in respect of
Article 6 of the said Protocol, from the 18th day of July, 2013
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PROTOCOL
AMENDING THE AGREEMENT
BETWEEN
THE GOVERNMENT OF THE REPUBLIC OF INDIA
AND
THE GOVERNMENT OF AUSTRALIA
FOR THE AVOIDANCE OF DOUBLE TAXATION
AND THE PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME
The Government of the Republic of India and the Government of Australia,
Desiring to amend the Agreement between the Government of the Republic of India and the Government of Australia for the avoidance of double taxation, and the prevention of fiscal evasion with respect to taxes on income signed at Canberra on the 25th day of July 1991 (in this Protocol referred to as "the Agreement"),
Have agreed as follows:
ARTICLE 1
Article 3 of the Agreement is amended by inserting new sub-paragraph (k) in paragraph (1):
"(k) the term "national", in relation to a Contracting State, means:
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(i
)
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any individual
possessing the nationality or citizenship of that Contracting State; and
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(ii
)
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any legal person,
company, partnership or association deriving its status as such from the laws in
force in that Contracting State."
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ARTICLE 2
Article 5 of the Agreement is amended by omitting paragraph 3 and substituting:
'(3) Notwithstanding the provisions of paragraphs 1 and 2, where an enterprise of a Contracting State:
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(a
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furnishes services,
including consultancy services, through employees or other personnel
engaged by the enterprise for such purpose, but only where activities of that nature continue (for
the same or connected project) within that other State for a period or periods aggregating more
than 183 days in any 12 month period;
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(b
)
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carries on activities
(including the operation of substantial equipment) in the other State in the
exploration for or exploitation of natural resources situated in that other State for a period or
periods exceeding in the aggregate 90 days in any 12 month period; or
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(c
)
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operates substantial
equipment in the other State [including as provided in sub-paragraph (b)] for
a period or periods exceeding in the aggregate 183 days in any 12 month period;
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such activities shall be deemed to be carried on through a permanent establishment of the enterprise situated in that other State, unless the activities are limited to those mentioned in paragraph 4 which, if exercised through a fixed place of business, would not make this place of business a permanent establishment under the provisions of that "paragraph."'
Article 7 of the Agreement is amended by omitting paragraph 1 and substituting:
"(1) The profits of an enterprise of a Contracting State shall be taxable only in that State unless the enterprise carries on business in the other Contracting State through a permanent establishment situated therein. If the enterprise carries on business as aforesaid, the profits of the enterprise may be taxed in the other State but only so much of them as is attributable to that permanent establishment."
ARTICLE 4
The Agreement is amended by inserting:
"ARTICLE 24A
NON-DISCRIMINATION
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(1)
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Nationals of
a Contracting State shall not be subjected in the other Contracting State to any
taxation or any requirement connected therewith, which is other or more burdensome than the
taxation and connected requirements to which nationals of that other State in the same
circumstances, in particular with respect to residence, are or may be subjected. This provision
shall, notwithstanding the provisions of Article 1, also apply to persons who are not residents of
one or both of the Contracting States.
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(2)
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The taxation
on a permanent establishment which an enterprise of a Contracting State has in the
other Contracting State shall not be less favourably levied in that other State than the taxation
levied on enterprises of that other State carrying on the same activities. This provision shall not
be construed as obliging a Contracting State to grant to individuals who are residents of the other
Contracting State any personal allowances, reliefs and reductions for taxation purposes on
account of civil status or family responsibilities which it grants to its own residents. This
provision shall not be construed as preventing a Contracting State from charging the profits of a
permanent establishment which a company of the other Contracting State has in the first
mentioned State at a rate of tax which is higher than that imposed on the profits of a similar
company of the first mentioned Contracting State, nor as being in conflict with the provisions of
paragraph 3 of Article 7.
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(3)
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Except where
the provisions of paragraph 1 of Article 9, paragraph 6 of Article 11 or paragraph 6
of Article 12, apply, interest, royalties and other disbursements paid by an enterprise of a
Contracting State to a resident of the other Contracting State shall, for the purpose of determining
the taxable profits of such enterprise, be deductible under the same conditions as if they had been
paid to a resident of the first-mentioned State.
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(4)
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Enterprises
of a Contracting State, the capital of which is wholly or partly owned or controlled,
directly or indirectly, by one or more residents of the other Contracting State, shall not be
subjected in the first-mentioned State to any taxation or any requirement connected therewith
which is other or more burdensome than the taxation and connected requirements to which other,
similar enterprises of the first-mentioned State are or may be subjected.
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(5)
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The provisions
of this Article shall, notwithstanding the provisions of Article 2, apply to taxes of
every kind and description.
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(6)
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This Article
shall not apply to any provision of the laws of a Contracting State which:
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(a
)
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is designed
to prevent the avoidance or evasion of taxes, including measures designed to
address thin capitalization or to ensure that taxes can be effectively collected or recovered;
or
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(b
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provides tax
incentives to eligible taxpayers for expenditure on research or development,
provided that a company that is a resident of one Contracting State and is wholly or partly
owned by residents of the other State can access such incentives on the same terms and
conditions as any other company that is a resident of the first-mentioned State; or
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(c
)
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is agreed between
the Contracting States through an Exchange of Notes."
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ARTICLE 5
The Agreement is amended by omitting Article 26 and substituting:
"ARTICLE 26
EXCHANGE OF INFORMATION
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(1)
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The competent
authorities of the Contracting States shall exchange such information (including
documents or certified copies of the documents) as is foreseeably relevant for carrying out the
provisions of this Agreement or to the administration or enforcement of the domestic laws
concerning taxes of every kind and description imposed on behalf of the Contracting States,
insofar as the taxation thereunder is not contrary to the Agreement. The exchange of information
is not restricted by Articles 1 and 2.
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(2)
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Any information
received under paragraph 1 by a Contracting State shall be treated as secret in
the same manner as information obtained under the domestic laws of that State and shall be
disclosed only to persons or authorities (including courts and administrative bodies) concerned
with the assessment or collection of the enforcement or prosecution in respect of, or the
determination of appeals in relation to the taxes referred to in paragraph 1, or the oversight of the
above. Such persons or authorities shall use the information only for such purposes. They may
disclose the information in public court proceedings or in judicial decisions. Notwithstanding the
foregoing, information received by a Contracting State may be used for other purposes when
such information may be used for such other purposes under the laws of both States and the
competent authority of the supplying State authorizes such use.
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(3)
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In no case shall
the provisions of paragraphs 1 and 2 be construed so as to impose on a
Contracting State the obligation:
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(a
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to carry out
administrative measures at variance with the laws and administrative practice of
that or of the other Contracting State;
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(b
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to supply information
(including documents or certified copies of the documents) which is
not obtainable under the laws or in the normal course of the administration of that or of the
other Contracting State;
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(c
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to supply information
which would disclose any trade, business, industrial, commercial or
professional secret or trade process, or information the disclosure of which would be
contrary to public policy (ordre public).
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(4)
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If information
is requested by a Contracting State in accordance with this Article, the other
Contracting State shall use its information gathering measures to obtain the requested
information, even though that other State may not need such information for its own tax
purposes. The obligation contained in the preceding sentence is subject to the limitations of
paragraph 3 but in no case shall such limitations be construed to permit a Contracting State to
decline to supply information solely because it has no domestic interest in such information.
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(5)
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In no case shall
the provisions of paragraph 3 be construed to permit a Contracting State to
decline to supply information solely because the information is held by a bank, other financial
institution, nominee or person acting in an agency or a fiduciary capacity or because it relates to
ownership interests in a person."
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The Agreement is amended by inserting:
"ARTICLE 26A
ASSISTANCE IN THE COLLECTION OF TAXES
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(1)
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The Contracting
States shall lend assistance to each other in the collection of revenue claims.
This assistance is not restricted by Articles 1 and 2. The competent authorities of the Contracting
States may by mutual agreement settle the mode of application of this Article.
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(2)
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The term "revenue
claim" as used in this Article means an amount owed in respect of taxes of
every kind and description imposed on behalf of the Contracting States, insofar as the taxation
thereunder is not contrary to this Agreement or any other instrument to which the Contracting
States are parties, as well as interest administrative penalties and costs of collection or
conservancy related to such amount.
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(3)
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When a revenue
claim of a Contracting State is enforceable under the laws of that State and is
owed by a person who, at that time, cannot, under the laws of that State, prevent its collection,
that revenue claim shall, at the request of the competent authority of that State, be accepted for
purposes of collection by the competent authority of the other Contracting State. That revenue
claim shall be collected by that other State in accordance with the provisions of its laws
applicable to the enforcement and collection of its own taxes as if the revenue claim were a
revenue claim of that other State.
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(4)
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When a revenue
claim of a Contracting State is a claim in respect of which that State may, under
its law, take measures of conservancy with a view to ensure its collection, that revenue claim
shall, at the request of the competent authority of that State, be accepted for purposes of taking
measures of conservancy by the competent authority of the other Contracting State. That other
State shall take measures of conservancy in respect of that revenue claim in accordance with the
provisions of its laws as if the revenue claim were a revenue claim of that other State even if, at
the time when such measures are applied, the revenue claim is not enforceable in the first-mentioned
State or is owed by a person who has a right to prevent its collection.
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(5)
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Notwithstanding
the provisions of paragraphs 3 and 4, a revenue claim accepted by a Contracting
State for purposes of paragraph 3 or 4 shall not, in that State, be subject to the time limits or
accorded any priority applicable to a revenue claim under the laws of that State by reason of its
nature as such. In addition, a revenue claim accepted by a Contracting State for the purposes of
paragraph 3 or 4 shall not, in that State, have any priority applicable to that revenue claim under
the laws of the other Contracting State.
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(6)
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Proceedings
with respect to the existence, validity or the amount of a revenue claim of a
Contracting State shall only be brought before the courts or administrative bodies of that State.
Nothing in this Article shall be construed as creating or providing any right to such proceedings
before any court or administrative body of the other Contracting State.
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(7)
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Where, at any
time after a request has been made by a Contracting State under paragraph 3 or 4
and before the other Contracting State has collected and remitted the relevant revenue claim to
the first-mentioned State, the relevant revenue claim ceases to be
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(a
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in the case
of a request under paragraph 3, a revenue claim of the first-mentioned State that
is enforceable under the laws of that State and is owed by a person who, at that time, cannot,
under the laws of that State, prevent its collection, or
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(b
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in the case
of a request under paragraph 4, a revenue claim of the first-mentioned State in
respect of which that State may, under its laws, take measures of conservancy with a view to
ensure its collection the competent authority of the first-mentioned State shall promptly
notify the competent authority of the other State of that fact and, at the option of the other
State, the first-mentioned State shall either suspend or withdraw its request.
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(8)
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In no case shall
the provisions of this Article be construed so as to impose on a Contracting State
the obligation:
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(a
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to carry out
administrative measures at variance with the laws and administrative practice of
that or of the other Contracting State;
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(b
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to carry out
measures which would be contrary to public policy (ordre public);
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(c
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to provide assistance
if the other Contracting State has not pursued all reasonable measures
of collection or conservancy, as the case may be, available under its laws or administrative
practice;
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(d
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to provide assistance
in those cases where the administrative burden for that State is clearly
disproportionate to the benefit to be derived by the other Contracting State."
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ARTICLE 7
ENTRY INTO FORCE
The Contracting States shall notify each other in writing through diplomatic channel of the completion of their domestic requirements for the entry into force of this Protocol. The Protocol, which shall form an integral part of the Agreement, shall enter into force on the date of the last notification, and thereupon shall have effect:
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(a
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in the case
of India, in respect of income derived in any fiscal year beginning on or after 1 April
next following the date on which the Protocol enters into force;
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(b
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in the case
of Australia, with regard to Australian tax, in relation to income, profits or gains of
any year of income beginning on or after 1 July next following the date on which the Protocol
enter into force;
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(c
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for the purposes
of Articles 24A (Non-discrimination) and 26 (Exchange of Information) of the
Agreement, from the date of entry into force of this Protocol;
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(d
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notwithstanding
the provisions of sub-paragraphs (a), (b) and (c), Article 26A (Assistance in the
Collection of Taxes) of the Agreement shall have effect from the date agreed in an exchange of
notes through the diplomatic channel.
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IN WITNESS WHEREOF the undersigned, being duly authorised, have signed this Protocol.
DONE in duplicate at New Delhi, India this 16th day of December, 2011, in the English and Hindi languages, both texts equally authentic, the English text to be the operative one in any case of doubt.