c contents - income tax, gst & indirect taxes, corporate ... · page i-27 contents 7.11...
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About the Author I-5Foreword I-7Preface I-15Acknowledgement I-19Chapter-heads I-21Abbreviations I-59List of cases I-67
1IntroductIon
1.1 Law 11.2 what is International Law? 11.3 sources of International Law 21.4 subjects of International Law 61.5 sources of Law relating to international taxation 6
1.5.1 tax equity and tax Neutrality 71.6 tax treaties 71.7 2014 Model Convention of oECd 81.8 Issues addressed by a treaty 9
1.8.1 India and dtAAs 9
2Persons covered (ArtIcLe 1 of oecd Mc)
2.1 Article 1 of the oECd MC 13
CContents
I-23
CoNtENts I-24
PAGE
2.2 Key points from oECd MC Commentary 2014 on Article 1 142.3 other relevant Points 152.4 Key decisions 16
3tAXes covered (ArtIcLe 2 of oecd Mc)
3.1 Article 2 of oECd MC 173.2 Key Points from Commentary 2014 on Article 2 of oECd MC 183.3 other Key Points 19
4GenerAL defInItIons (ArtIcLe 3 of oecd Mc)
4.1 Various definitions in Paragraph 1 234.1.1 Person 234.1.2 ‘Company’ 264.1.3 ‘International traffic’ 274.1.4 “Competent Authority” 304.1.5 ‘Business’ 324.1.6 ‘tax’ 344.1.7 ‘National’ 374.1.8 Article 3(2): definitions of terms not defined in
Model Convention 404.1.9 Enterprise 41
4.2 Liable to tax 414.2.1 difference between liable to tax and subject to tax 42
4.3 other concepts 434.4 tax residency Certificate (trC, in short) 43
4.4.1 relevant points regarding trC 444.4.2 tax residency in the case of Corporations 45
4.5 Meaning of the terms not defined in the treaty 46
5subject to tAX (reLAtInG to
ArtIcLe 1 of oecd Mc)
5.1 Introduction 47
PAGE
I-25 CoNtENts
5.2 scope of subject to tax Clause 48
5.3 Utility of the subject to tax Clause 49
5.4 oECd Concept of ‘subject to tax’ 49
5.5 the Commentary 2014 on Article 1 of oECd MC 51
5.6 “subject to tax” as explained by hon’ble supreme Court 52
5.7 subject to tax Clause as per Klaus Vogel 52
5.8 subject to tax clauses in India’s dtAAs 52
6source vs. resIdence (ArtIcLe 4 of oecd Mc)
6.1 Introduction 62
6.1.1 residence based taxation 63
6.1.2 source based taxation 63
6.2 residence status under Article 4 of oECd MC 64
6.3 oECd Commentary 2014 on Article 4 65
6.4 different terms explained 68
6.5 rule of residence under Indian Income tax Laws 69
6.6 taxability of Income in India 73
6.7 residential status in India in some cases 73
6.8 Key decisions on the issue of residential status 78
6.8.1 year for determination of status 78
6.8.2 Meaning and scope of certain expressions 78
6.8.3 year of determination 79
6.8.4 Conditions of residential status 79
6.8.5 Exclusion/inclusion of time period 81
6.8.6 Closure of business 82
6.8.7 residential status of other entities 82
6.8.8 dwelling house 83
6.8.9 Case of dual residency-tie Breaker 84
6.8.10 Place of residence 84
6.8.11 Benefit under dtAA 84
6.8.12 Misc. 85
PAGE
CoNtENts I-26
6.9 residential status in some dtAAs 86
6.10 dual residency and tie Breaker rule 89
7PLAce of effectIve MAnAGeMent (PoeM)
(reLAtInG to ArtIcLe 4 of oecd Mc)
7.1 Introduction 92
7.2 history of PoEM 93
7.2.1 Central management and control 94
7.2.2 Control and management 95
7.2.3 Place of management 96
7.3 PoEM 97
7.4 Concept of PoEM in Income-tax Act, 1961 98
7.4.1 PoEM in section 115VC 98
7.4.2 PoEM in section 6 98
7.4.3 rationale of introduction of concept of PoEM by the Finance Bill, 2015 in the Budget Proposal for 2015-16 100
7.4.4 PoEM is a fact dependent exercise 100
7.4.5 Effect of the amendment 101
7.4.6 Guiding principles 101
7.4.7 deferment of the provisions 106
7.5 Certain consequences of the new provisions 106
7.5.1 Possible safeguards 107
7.6 residential status in respect of Fund Managers as per Finance Act, 2015 108
7.6.1 Certain activities of fund managers not to constitute business connection in India (section 9A) 109
7.7 Interpretation of the expression ‘PoEM’ in a UK Case 111
7.8 Conflict between effect of definition of PoEM in section 6 and dtAA 112
7.8.1 In the case of persons governed by dtAA 112
7.8.2 In the case of persons not governed by any dtAA 113
7.9 Analysis of various terms used in the Explanation inserting ‘PoEM’ 113
7.10 onus in relation to PoEM 117
PAGE
I-27 CoNtENts
7.11 Countries - India does not have concept of PoEM in the dtAAs 117
7.12 PoEM in the dtAAs and tie breaker rule 118
7.13 oECd Commentary 2014 on Article 4 - determination of residence 120
7.14 relevant points 122
7.15 residential status of companies and PoEM in the domestic law of some countries 123
7.16 PoEM in Article 8 of dtAA relating to shipping and Air transport business 124
7.17 PoEM in Capital Gains 125
7.18 Key decisions 127
8PerMAnent estAbLIshMent
(ArtIcLe 5 of oecd Mc)
8.1 Introduction 132
8.2 Article 5, of oECd Model Convention 133
8.2.1 PE in UN Model Convention 134
8.3 relevance of PE 135
8.4 Examples 136
8.4.1 Not taxable in India (source state) in absence of PE 136
8.4.2 taxable in source state as there was a PE 137
8.5 Various terms 138
8.5.1 what is ‘permanent’? 138
8.5.2 the concept of “through which” 139
8.5.3 what is wholly, or almost wholly, or partly? 140
8.5.4 what is business? 141
8.5.5 Examples of what is business 142
8.5.6 Examples of what is not business/business income 143
8.5.7 A Place of Business 143
8.5.8 how to identify a place, as a place of business 144
8.5.9 Examples of place of business 145
8.5.10 Examples of not a place of business 148
PAGE
CoNtENts I-28
8.5.11 the concept of “the business is Carried on” 151
8.6 Fixedness 152
8.6.1 Ingredients of fixedness 152
8.6.2 to identify whether the Place of Business is fixed 153
8.7 Location test 153
8.8 the duration test 155
8.8.1 Certain fixed duration 155
8.8.2 regularity, continuity and repetitiveness 155
8.8.3 Not everlasting or indefinite 156
8.8.4 Aggregation of time 158
8.9 disposal test 158
8.9.1 disposal test as per oECd MC 158
8.9.2 some Foreign Courts’ decisions 159
8.9.3 Indian Courts’ decisions 163
8.9.4 relationship among Location test, duration test and disposal test 166
8.10 Functional test 167
8.10.1 Characteristics of Functional test 167
8.10.2 Examples 167
8.11 Business must be owned by Non-resident Enterprise 169
8.12 spatial delimitation test 172
8.13 Paragraph 2 173
8.13.1 Examples 174
8.14 different expressions used in Article 5 175
8.14.1 A Place of Management 175
8.14.2 A Branch 177
8.14.3 office 178
8.14.4 Factory and workshop 181
8.14.5 habitually 181
8.14.6 Exercise 182
8.14.7 to conclude contracts 182
8.15 Mines, oil or Gas wells, Quarries or other places of extraction of natural resources 182
8.15.1 what is mineral oil? 183
PAGE
I-29 CoNtENts
8.16 other Forms of PE 185
8.16.1 E-commerce and PE 185
8.16.2 Attribution of Profits to a Virtual PE 190
8.16.3 some examples of existence or absence of virtual PE 191
8.16.4 Conditions for a website to be a PE in the source Country 191
8.16.5 recommendations oECd under BEPs Action Plan 192
8.17 Construction PE and service PE 193
8.17.1 A building site or Construction Project 193
8.17.2 Installation Project 193
8.17.3 supervisory Activity PE 200
8.18 Liaison office (L.o.) 202
8.18.1 Activities of Liaison office 203
8.18.2 Further relevant points on Lo 204
8.19 Paragraph 4 of oECd Model Convention 205
8.19.1 Points from Commentary 2014 on oECd MC 205
8.19.2 Expressions used in paragraph 207
8.20 the concept of preparatory/auxiliary 212
8.20.1 Meaning of term ‘Preparatory’ 212
8.20.2 Meaning of term ‘Auxiliary’ 212
8.20.3 Characteristics attributable to activities of preparatory or auxiliary 213
8.21 Views of the Courts 214
8.22 Agency PE 217
8.22.1 Agency PEs as per UN Model 217
8.22.2 who is an agent? 218
8.22.3 the principal 219
8.22.4 Ingredients of principal to principal relationship 219
8.22.5 different classes of Agents 219
8.22.6 who is a dependent Agent (dA) 220
8.22.7 the authority of agent to conclude contract 221
8.22.8 Authority vs. duty 222
8.22.9 Comparison between dependent Agent and an Independent Agent 223
PAGE
CoNtENts I-30
8.22.10 Participation in Negotiations by Agent 224
8.22.11 Kind of Activities by the Agent 225
8.22.12 Nature of orders secured by Agent 225
8.22.13 Examples of dAPE 225
8.22.14 Independent agent 232
8.22.15 dependent Agent compensated on ALP basis 233
8.22.16 Inter relation among paras 4, 5 & 6 of oECd Model Convention 239
8.23 Paragraph 6 240
8.23.1 Broker 240
8.23.2 Commission agent 241
8.23.3 distinction between Broker and Commission agent 241
8.23.4 Independent status 241
8.23.5 the meaning of acting in the ordinary course of their business 242
8.23.6 Examples 243
8.24 Paragraph 7 245
8.25 some general examples in respect of PE 246
8.26 Comparative analysis of PE in different dtAAs which India has with other countries 246
9IncoMe froM IMMovAbLe ProPerty
(ArtIcLe 6 of oecd Mc)
9.1 Article 6 of oECd Model Convention 276
9.2 As per oECd Model Commentary 2014 277
9.3 Income derived from Immovable Property 277
9.4 Computation of Income 278
9.5 what Constitutes Immovable Property Under Article 6(2) 278
9.6 Immovable Property of Enterprises - Article 6(4) 278
9.7 Key decisions 279
PAGE
I-31 CoNtENts
10busIness ProfIts
(ArtIcLe 7 of oecd Mc)
10.1 Business Profits as per Article 7 of oECd MC 282
10.2 Guidelines on Business Profits from oECd Model Commentary 2014 283
10.3 other relevant points 288
10.4 Meaning and scope of Business Profits 288
10.4.1 Essential characteristics of business and business profits 289
10.4.2 Instances of Business profits 291
10.4.3 Instances of not being Business profit 297
10.4.4 Place of accrual of business profit 299
10.5 reimbursement of expenses and Business Profit 300
10.5.1 Profit element in the reimbursement 301
10.5.2 reimbursement of salary 302
10.6 Business Profit under Income-tax Act, 1961 303
10.6.1 Income of non-resident as per Explanation 1(b) to section 9(1)(i) of Income-tax Act,1961 303
10.6.2 Business profit and section 44BBB of Income-tax Act, 1961 304
10.6.3 Business profit and section 44d of the Income-tax Act, 1961 305
10.6.4 Business Profit and section 44C of the Income-tax Act, 1961 305
10.6.5 Business profit and section 44BB of Income-tax Act 308
10.6.6 “Business Connection” under Income-tax Act 311
10.6.7 Business profit, dtAA and Income-tax Act 317
10.6.8 others 317
10.7 Activities outside India 317
10.7.1 Applicability of the new Explanation 318
10.7.2 some more examples 319
10.7.3 offshore activities 320
10.7.4 Principles for taxability on account of offshore supplies/offshore services 322
PAGE
CoNtENts I-32
10.7.5 Estimation of taxable profit 325
10.7.6 situs of income 328
10.7.7 other Instances of activities outside India 328
10.8 Business profit and PE/head office 331
10.8.1 Notional Profit 331
10.8.2 remuneration to agent 331
10.8.3 Profit of the PE Attributed to both states 332
10.8.4 Commission between head office and branch 333
10.8.5 Interest payment 333
10.8.6 outsourcing of commercial activities 333
10.8.7 Instances of PE/Branch activities 334
10.8.8 taxability in absence of PE 337
10.8.9 Business Profit and Agency PE 340
10.8.10 Business Profit and Liaison office 341
10.8.11 Profit and losses of PE 342
10.8.12 Expenditure allowable from the business profit of the PE 342
10.8.13 Attribution of Business profits to PE 346
10.8.14 some instances of Attribution of Profit to the PE 348
10.9 other cases of Chargeability of Profit under Article 7 350
10.10 Part or whole of profit 351
10.11 rules for computation of business income as per Article 7 352
10.12 Business profits - Arm’s length transactions between the Permanent Establishment and its parent company 352
10.12.1 Key decisions 353
10.12.2 Business profits - Attribution rule and Indian Income-tax Act 353
10.13 Business Profits - Force of attraction rule 355
10.14 Business Profit and turnkey Project 356
10.14.1 other Instances of taxability of Business profit from turnkey Project 356
10.14.2 taxability of consortium and its members 359
10.15 Business Profit and MAt Provisions 360
10.16 Business Profit and Notional Interest 362
10.16.1 Examples 362
PAGE
I-33 CoNtENts
10.17 Business profit and interest income 364
10.17.1 Examples 364
10.18 Business profit and tds 365
10.18.1 Examples 365
10.19 Business Profit and royalty 366
10.19.1 “Effectively connected” 368
10.19.2 Instances of “effectively connected” 369
10.19.3 Instances where royalty income was taxed as business profit 370
10.20 Business Profit and Fee for technical services (Fts) 372
10.20.1 strategic consultancy services 373
10.20.2 other Instances 373
10.20.3 Key decisions 374
10.21 year of taxability 378
10.22 taxability of Amalgamation/takeover of Entity 378
10.23 Business Profit and other issues 379
10.23.1 Composite Contracts 379
10.23.2 resale of Goods 379
10.23.3 Broadcasting/satellite 379
10.23.4 Insurance Claim 379
10.23.5 Compensation for fraudulent acts, misrepresentation or breach of trust 380
10.23.6 Multiplicity of taxing 380
10.23.7 Procedure 380
10.23.8 Capital receipt 380
10.23.9 Miscellaneous 380
11force of AttrActIon (reLAtInG to
ArtIcLe 7 of oecd Mc)
11.1 Concept 381
11.2 Categories of FoA rule 381
11.3 scope of FoA rule 382
11.4 Conditions for invoking FoA rule 383
PAGE
CoNtENts I-34
11.5 reasons why developing Countries prefer FoA rule 384
11.6 Examples of how FoA rule works 385
11.7 FoA rule under Income-tax Act, 1961 386
11.8 determination of income in the case of non-residents 387
11.8.1 Business connection 388
11.9 FoA rule as contemplated in oECd Model 388
11.9.1 Article 7 of oECd Model (2010 Edition/2014 Edition) 388
11.9.2 the salient changes in oECd MC 2010 389
11.9.3 similarities and differences in FoA rules in two MCs 390
11.9.4 Key points from oECd Commentary of 2008 391
11.9.5 Key points from oECd Model Commentary 2014 392
11.9.6 Explanation by Klaus Vogel 392
11.10 FoA rule in Article 7 as per UN Model Convention and its Commentary 393
11.10.1 Article 7 as per UN MC 393
11.10.2 the Commentary (UN MtC Commentary 2011) on FoA 394
11.10.3 Concept of “same or similar” as used in Article 7 of UN Model Convention 395
11.11 Force of Attraction rule in different dtAA’s with India 396
11.11.1 No FoA rule 396
11.11.2 Limited FoA rule (first category) 397
11.11.3 Limited FoA rule (second category) 397
11.11.4 Limited FoA rule (third category) 398
11.11.5 Limited FoA rule (fourth category) 399
11.11.6 Limited FoA rule (fifth category) 399
11.12 the courts views on ‘FoA’ and “same or similar” 403
12IncoMe froM shIPPInG And AIrcrAft
busIness (ArtIcLe 8 of oecd Mc)
12.1 Article 8 of oECd Model Convention 407
12.2 Guidelines from oECd Model Commentary 2014 408
12.3 Articles 8(1) and 8A(1) of the oECd and UN Models 410
PAGE
I-35 CoNtENts
12.4 sources of profit covered 411
12.4.1 sources of profit not covered 411
12.5 Place of Effective Management 411
12.6 Article 8(3) - home harbour 412
12.7 Article 8(4) - Pooling Arrangement 412
12.8 Key decisions 413
12.8.1 regarding PoEM 413
12.8.2 scope of Article 8 413
12.8.3 Meaning and scope of certain expressions 416
12.8.4 software 417
12.8.5 Feeder vessel 417
12.8.6 situs of taxation 418
12.8.7 Exemption from taxation 418
12.8.8 slot Fee 419
12.8.9 tax residency Certificate 419
12.8.10 Preparatory and auxiliary activity 420
12.8.11 Local traffic 420
12.8.12 Beneficial owner 420
12.8.13 Application of provisions of Income-tax Act 420
12.8.14 Application of other Articles 421
12.8.15 Misc. 422
13AssocIAted enterPrIses
(ArtIcLe 9 of oecd Mc)
13.1 Article 9 of oECd MC 424
13.1.1 Ingredients of the Article 9 425
13.2 Explanation of Article 9 as per oECd MC Commentary 2014 426
13.3 Key differences between Article 9 “Associated Enterprises” of oECd Model and other Models/dtAA 431
13.3.1 differences with other Conventions 431
13.3.2 differences with dtAAs/protocol 432
13.4 Key decisions 433
13.5 transfer Pricing Provisions under Income-tax Act, 1961 434
PAGE
CoNtENts I-36
14trAnsfer PrIcInG (reLAtInG to
ArtIcLe 9 of oecd Mc)
14.1 Introduction 435
14.1.1 Approach to prevent revenue loss 435
14.1.2 tP regulations - Internationally accepted mechanism 436
14.2 oECd Guidelines 437
14.3 Meaning of transfer pricing 437
14.4 transfer pricing regulations in India 438
14.5 Various concepts under Indian transfer pricing regulations 439
14.5.1 Meaning of transaction 439
14.5.2 “Uncontrolled transaction” 439
14.5.3 “Controlled transaction” 440
14.5.4 Arrangement 440
14.5.5 Understanding 440
14.5.6 Action 441
14.5.7 International transaction 441
14.5.8 Enterprise 447
14.5.9 Associate Enterprise 448
14.5.10 Arm’s Length Price (ALP) 451
14.5.11 tested Party 458
14.6 Methods for determination of ALP 459
14.6.1 relevant points 459
14.7 Explanation of Methods of determination of ALP 460
14.7.1 Comparable uncontrolled price (i.e. CUP) method 460
14.7.2 resale price method (i.e. rPM) 465
14.7.3 Cost plus method 467
14.7.4 Profit split method 469
14.7.5 transactional net margin method (tNMM) 470
14.7.6 such other method as may be prescribed by the Board 476
14.8 Most appropriate method 477
14.8.1 Criteria as per rule 10B(2) for selecting the MAM 478
PAGE
I-37 CoNtENts
14.8.2 relevant points in the context of MAM 479
14.9 Comparables 482
14.9.1 Examples 484
14.9.2 Filters for selecting comparables 494
14.10 safe harbour rule 502
14.10.1 relevant points 503
14.10.2 New safe harbour rules for International transactions 505
14.11 Information and documents to be kept and maintained under section 92d 505L
14.11.1 Key decisions 507
14.11.2 documentation and reporting as per BEPs guidelines 50714.12 Advance pricing agreement in india 509
14.12.1 Various Advance Pricing Agreements 51914.13 reference to tPo 520
14.13.1 the ingredients of section 92CA 52214.13.2 the effect of the provisions contained in section 92CA 52314.13.3 Key decisions on this subject 524
14.14 Alternate dispute resolution mechanism 53014.14.1 relevant points in the context of transfer pricing, international transactions and dispute resolution mechanism 532
14.15 other Key decisions on transfer pricing 53314.15.1 International transactions and tP adjustments 53314.15.2 Circumstances warranting tP adjustment 53314.15.3 Limitation on the power 53614.15.4 scope of tP adjustment 53714.15.5 Procedural aspects of tP adjustment 53814.15.6 Evaluation of tP adjustments 54314.15.7 Aggregation and segregation 543
14.16 transfer Pricing Guidelines 545
15dIvIdend (ArtIcLe 10 of oecd Mc)
15.1 Comparative Analysis 548
15.2 As per oECd Model Commentary 2014 549
PAGE
CoNtENts I-38
15.3 dividend - Nature and taxability under Income-tax Act 550
15.4 Article 10(1) - distributive rights 551
15.5 Article 10(1) - Meaning of the term ‘PAId’ 551
15.6 Meaning of term “May be taxed” 552
15.7 Article 10(2) - taxing rights of the source Country 553
15.8 Article 10(3) - definition of the term ‘dIVIdENd’ 554
15.8.1 dividend includes 554
15.8.2 dividend excludes 554
15.9 Article 10(4) - Exclusions in case of PE 554
15.10 Article 10(5) - No Extra-territorial taxation 555
15.11 dividend - recent Updates - removal of Cascading Effect 555
15.12 Key points from oECd Model Commentary 2014 556
15.13 oECd MC 2014 - India’s reservation on Article 10 558
15.14 Key decisions 558
15.14.1 scope of Article 558
15.14.2 Application of provisions of Income-tax Act 559
15.14.3 dividend and PE 559
15.14.4 dividend derived/received outside India 559
15.14.5 Credit of taxes paid 560
15.14.6 year of taxability 560
15.14.7 Certain Expressions 560
15.14.8 dividend or Interest 560
15.14.9 Gross or net dividend 561
15.14.10 Point of Accrual 562
15.14.11 rate of taxation of dividend 562
16tAXAtIon of Interest
(ArtIcLe 11 of oecd Mc)
16.1 Article 11 of oECd Model Convention 563
16.2 Guidelines from oECd Model Commentary 2014 on Article 11 564
16.2.1 Key points from oECd Model Commentary 2014 565
16.3 Interest - definition under the Act 567
16.4 Interest - taxability under the Act 568
PAGE
I-39 CoNtENts
16.5 Article 11(1) - distributive rule 568
16.5.1 Meaning of the term ‘Paid’ 568
16.5.2 Meaning of the term “attributable to” 569
16.6 Article 11(1) - Meaning of the term ‘Arising’ 569
16.7 Article 11(2) - taxing rights of the source Country 569
16.8 Article 11(3) - definition of Interest 569
16.9 Article 11(4) - Exclusions in case of PE 570
16.10 Article 11(5) - sourcing rules 570
16.11 Article 11(6) - Arm’s Length Principle 570
16.12 other relevant points in the context of interest under Article 11 571
16.13 Key decisions 572
16.13.1 what is interest? 572
16.13.2 rate of tax on Interest 572
16.13.3 whether tax rate on interest includes surcharge 573
16.13.4 Items of income which are Interest 573
16.13.5 taxability of interest income 574
16.13.6 Items of income which are not interest 575
16.13.7 Interest and PE 576
16.13.8 Applicability of other Articles 577
16.13.9 Gross interest or net interest 577
16.13.10 Exemption from taxation 577
16.13.11 Benefit under dtAA 578
16.13.12 Accrual of interest income 578
16.13.13 the time of Accrual of interest 580
16.13.14 Interest as deduction 580
16.13.15 tds from interest payment 580
16.13.16 Applicability of provisions of Income-tax Act 581
16.13.17 Misc. 582
16.14 Amendment by Finance Act, 2015 583
17royALty (ArtIcLe 12 of oecd Mc)
17.1 Introduction 585
PAGE
CoNtENts I-40
17.1.1 Ingredients of royalty 586
17.1.2 Commercial exploitation of asset 586
17.1.3 royalty in India-Australia dtAA 586
17.1.4 royalty in earlier decisions 586
17.2 definitions 587
17.3 royalty as per Article 12 of oECd MC 589
17.3.1 taxing rights over royalty 590
17.3.2 Explanation on Article 12 as per oECd Commentary 2014 590
17.3.3 royalty as per UN Model Convention 595
17.4 royalty as per Income-tax Act 597
17.4.1 royalty as per Explanation 2 of section 9(1)(vi) 597
17.4.2 territorial nexus between royalty income and territory of India 598
17.4.3 Primary source rule and secondary source rule 599
17.4.4 decision in Qualcomm Incorporated’s case 600
17.4.5 Payment for data transmission services 601
17.4.6 section 115BBF- concessional rate of tax on royalty 601
17.5 Explanation of Various terms used in the definition of royalty 602
17.6 Computers and softwares 643
17.6.1 relevant views in the context of computer software 651
17.6.2 User right of software is royalty 652
17.6.3 Amendment by Finance Act 2012 654
17.6.4 Effect of Amendment 654
17.6.5 A comparison of payment for software treated as Business Income or treated as royalty 655
17.7 Cases where payments are not held as royalty 656
17.8 other payments not held as royalty 668
17.9 Payments held as royalty 670
17.10 other payments held as royalty 677
17.11 Payments for IP rights 680
17.11.1 Copyright in India - Australia dtAA 680
PAGE
I-41 CoNtENts
18fee for technIcAL servIces (reLAtInG
to ArtIcLe 12 of oecd Mc)
18.1 Introduction 682
18.1.1 what are ‘services’ and what are ‘technical services’ 682
18.2 the definition under Income-tax Act 684
18.2.1 Ingredients of Explanation 2 685
18.2.2 the tests of Fts 686
18.3 the expressions ‘Managerial’, ‘technical’ or ‘Consultancy’ services 687
18.3.1 the Managerial services 687
18.3.2 some more instances of “managerial services” 688
18.3.3 technical services 690
18.3.4 scope of human interface in the expression technical services used in section 9(1)(vii) 692
18.3.5 technical services & technology driven services 694
18.3.6 technical services under Model tax Conventions 695
18.3.7 some examples of technical services 696
18.3.8 Consultancy services 696
18.3.9 Fts/royalty under Composite Agreement 699
18.4 Fee for technical services and Fee for Included services 700
18.4.1 the key decisions on FIs 702
18.5 Article 12 (Fts) and Article 7 (Business Profits) 704
18.5.1 training Expenses and Fts 706
18.5.2 taxation of reimbursement of expenditure as Fts 711
18.5.3 taxation of Fts on cash Basis 716
18.6 Interplay of sections 44BB, 115A, 44dA and 44d of Income- tax Act 717
18.6.1 Effect of combined reading of these sections 720
18.6.2 Examples of interplay among these three sections 721
18.7 Cases where it is held that payment to NrE is Fts 726
18.7.1 Making available technical knowledge and know- how etc. 726
PAGE
CoNtENts I-42
18.7.2 Fts as per Explanation 2 to section 9(1)(vii) 728
18.7.3 technical services 729
18.7.4 Payment for design and drawings etc. 730
18.7.5 Payment for Managerial services 731
18.7.6 Fts as business Income 731
18.7.7 others 732
18.8 Cases where it is held that payment to NrE is not Fts 733
18.8.1 Cases where make available clause is not satisfied 733
18.8.2 Cases where payment is taxed as Business profit and not as Fts 736
18.9 Cases where payment is not taxable under section 9(1)(vii) of Income-tax Act 739
18.10 Fts as per India’s dtAAs 750
19“MAke AvAILAbLe” (reLAtInG to “fee for technIcAL servIces”)
19.1 Introduction 796
19.2 the Concept: (as explained in INdo - Us dtAA) 797
19.3 “Make Available” as explained by Indian Courts 801
19.4 other examples of make available explained by the Courts 813
19.5 Cases where “make available” condition was satisfied 815
19.6 Cases where “make available” condition was not satisfied 817
19.7 the principles culled out from various decisions/observations of the courts 819
20“MAy be tAXed”And “MAy
ALso be tAXed”
20.1 Introduction 822
20.2 the concept of “may and shall” 823
20.3 the concept of “may be taxed” as per Courts/tribunal 824
20.4 Comparative meaning of these expressions 828
20.5 “May be taxed” as per Klaus Vogel 829
20.6 Effect of sub-section (3) of section 90 of the Act 829
PAGE
I-43 CoNtENts
20.7 the memorandum explaining the objects of the said Explanation 831
20.8 Arguments contrary to the view taken in Essar Oil Ltd. vs. Addl. CIT 833
20.8.1 Unilateral retrospective amendment 833
20.8.2 observations in wNs North America Inc’s case on retrospective amendment 835
20.8.3 overriding effect of a tax treaty 836
20.8.4 other examples 837
20.9 A summary of the different views 838
21cAPItAL GAIns (ArtIcLe 13 of oecd Mc)
21.1 Article 13 oECd Model Convention 844
21.2 oECd Model Commentary 2014 845
21.3 Key points from the oECd MC Commentary 2014 on this Article 847
21.4 different sources of profit under this Article 848
21.5 Key decisions 849
21.5.1 scope of Article 13 849
21.5.2 scope of expression “movable Property” 851
21.5.3 scope of capital gains 851
21.5.4 taxability of Capital gains 852
21.5.5 rates of taxation of Capital gains 853
21.5.6 which dtAA will be applicable 853
21.5.7 Capital gains/loss vs. business income/loss 855
21.5.8 Notional capital gains 856
21.5.9 Failure of computational machinery 856
21.5.10 Not falling under ‘transfer’ 856
21.5.11 Application of provisions of Income-tax Act 857
21.5.12 Cases where capital gains is not taxable in India 859
21.5.13 Cases where capital gains is taxable in India 861
21.5.14 situs of Capital asset 861
21.5.15 Cases where benefit of dtAA could not be denied 862
PAGE
CoNtENts I-44
21.5.16 Movable property 862
21.5.17 Capital asset vs. stock-in-trade 862
21.6 Amendment by Finance Act, 2015 863
21.7 Amendment proposed by Finance Act 2016 864
22IndePendent PersonAL servIces (ArtIcLe 14 of oecd Mc) (deLeted)
22.1 Introduction 865
23IncoMe froM eMPLoyMent
(ArtIcLe 15 of oecd Mc)
23.1 Introduction 867
23.2 Article 15 868
23.2.1 Comparison between oECd MC and UN MC on Article 15 868
23.2.2 difference between the above conventions 869
23.3 oECd Commentary 2014 on Article 15 869
23.3.1 Guidelines on Article 15 as per oECd Model Commentary 2014 869
23.3.2 Illustrations provided in oECd MC Commentary 875
23.3.3 Income from Employment under Income-tax Act, 1961 875
23.3.4 Income from Employment under tax treaty 876
23.4 taxability - ship/Aircraft & Frontier workers 877
23.4.1 For ship/Aircraft 877
23.4.2 Frontier workers 877
23.5 dPs - EsoPs 878
23.5.1 Meaning of ‘Employ’ 878
23.6 Key decisions 878
23.6.1 Conditions of stay and residential status 878
23.6.2 reimbursement of remuneration 882
23.6.3 other amounts related to employment 883
23.6.4 year of taxability 884
PAGE
I-45 CoNtENts
23.6.5 salary taxable in India 884
23.6.6 remuneration received for services rendered outside India is not taxable in India 887
23.6.7 rent free Accommodation/Allowances 894
23.6.8 refund/demand in respect of taxes paid abroad 895
23.6.9 remuneration for working on ships/aircrafts 895
23.6.10 Misc. 896
24dIrector’s fees (ArtIcLe 16 of oecd Mc)
24.1 Introduction 898
24.2 Article 16 of oECd MC 898
24.3 Ingredients of the Article 898
24.4 Guidelines as per oECd Model Commentary 2014 899
24.5 Key points from oECd Model Commentary 2014 899
24.6 Meaning of certain expressions 900
24.6.1 As per Professor Klaus Vogel on double taxation conventions 900
24.7 relationship with Indian tax Laws 901
24.8 Key differences between Article 16 “directors’ Fees” in oECd Model convention and other Models/dtAAs 902
24.8.1 scope of this Article in some dtAAs 902
24.9 Key decisions 903
25entertAIners And sPortsPersons
(ArtIcLe 17 of oecd Mc)
25.1 Article 17 of oECd MC 905
25.2 Ingredients of this Article 905
25.3 Key terms 906
25.4 As per oECd Model Commentary 2014 908
25.5 Key points from oECd Model Commentary 2014 909
25.6 source rule 910
25.7 Income not to be included 910
PAGE
CoNtENts I-46
25.8 Income to be included 911
25.9 some relevant points 912
25.10 taxation in state of residence 912
25.11 Application of Indian Income-tax Act 913
25.11.1 section 80rr 913
25.11.2 section 115BBA 913
25.11.3 Board’s circulars 913
25.12 Exception as per Us technical Explanation, 1989 914
25.13 Key decisions 915
26PensIons (ArtIcLe 18 of oecd Mc)
26.1 Article 18 of oECd MC 918
26.2 Key terms 918
26.3 Guidelines from oECd Model Commentary 2014 919
26.4 Key differences between the oECd Model Convention and other Models/dtAAs 923
26.5 Key decisions 924
27GovernMent servIce
(ArtIcLe 19 of oecd Mc)
27.1 Article 19 of oECd MC 928
27.2 oECd Model Commentary 2014 on this Article 929
27.3 Certain Clarifications 930
27.3.1 Expression salaries, wages and other similar remuneration 930
27.3.2 Payment by a Government Body 930
27.3.3 Concept of ‘National’ for a ‘legal person’ 931
27.4 Primary right to tax 931
27.5 Comments of Klaus Vogel 931
27.6 Article 18 (Pension) and Article 19 (Government services) 932
27.7 Comparison among three model conventions 932
27.8 Government services in other dtAAs 933
PAGE
I-47 CoNtENts
27.9 Nature of Government Functions 934
27.10 Key decisions 934
28other IncoMe (ArtIcLe 21 of oecd Mc)
28.1 Article 21 of oECd MC 936
28.2 the corresponding Article of UN MC 936
28.3 Comparative study 937
28.4 As per oECd Model Commentary 2014 937
28.5 Key points from oECd Model Commentary 2014 938
28.6 Immovable Property 939
28.7 other income covered under Article 21 940
28.8 Countering double taxation 941
28.9 other relevant points 941
28.10 Chargeability of “Fees for included services” in absence of specific Article in tax treaties 942
28.11 Article relating to “other income” in some dtAAs 942
28.12 Key decisions 944
29students (ArtIcLe 20 of oecd Mc)
29.1 Article 20 of oECd MC 947
29.2 Conditions for applicability of Article 20 947
29.3 Key Expressions 948
29.4 Key points from oECd Model Commentary 2014 949
29.5 Key differences between Article 20 of oECd Model with other Models and dtAAs 951
29.5.1 Analogous law under the It Act 955
29.6 Key decisions 955
30cAPItAL (ArtIcLe 22 of oecd Mc)
30.1 Article 22 of oECd MC 957
30.2 Explanation of the paragraphs of this Article 957
PAGE
CoNtENts I-48
30.3 Key terms 958
30.4 Key points from oECd Model Commentary 2014 960
30.5 Key differences between Article 22 of oECd Model Convention and other Models/dtAAs 963
31foreIGn tAX credIt (ArtIcLe 23 oecd Mc)
31.1 Introduction 966
31.1.1 difference between credit method and exemption method 967
31.2 Categories of two methods 967
31.3 where Country ‘r’ has no dtAA with Country ‘s’ 971
31.4 Comparison of Full credit and ordinary credit methods 972
31.5 Another example to explain these methods 973
31.6 Exemption with progression for foreign income 974
31.7 A Comparison between Full exemptions vs. Exemption with progression methods 975
31.8 Unilateral relief 978
31.9 distinction between FtC (foreign tax credit) available and FtC not available 978
31.10 Exempt foreign income and domestic losses 979
31.11 Proportionate credit and attributable credit method 980
31.12 Limitation on credit - Excess foreign tax credits 981
31.13 Limitation on credit - Country-by-country approach 981
31.14 slicing rule with tax payer choice 982
31.15 Foreign tax credit - scheduler apportionment of foreign tax 986
31.16 Foreign tax credit - scheduler with non-final residence withholding tax 987
31.17 Use of losses - Excess foreign tax credits 988
31.18 Foreign tax credit - tax sparing 989
31.19 Allocation of expenses 991
31.20 Exemption - written back of foreign losses 993
31.21 Foreign tax credit - Quarantine of foreign losses 994
PAGE
I-49 CoNtENts
31.22 Underlying foreign tax credit 996
31.23 should tax credit be claimed from income-tax including surcharge and cess? 998
31.24 Exchange rate for the purposes of calculation of the quantum of foreign taxes for FtC 999
31.25 Can tax credit be claimed for dividend distribution tax paid under section 115-o? 1000
31.26 Can tax credit be claimed against the Minimum Alternative tax (‘MAt’) payable in India? 1000
31.27 observations of Klaus Vogel on Foreign tax Credit 1000
31.28 some relevant points in connection with foreign tax credit 1002
31.29 Method of giving Foreign tax Credit 1004
31.30 Foreign tax credit as per dtC 1005
31.31 other Key issues in foreign tax credit 1006
31.31.1 rules for giving foreign tax credit 1006
31.31.2 Credit of taxes paid in several countries on income earned in their territory 1007A
31.31.3 year of credit 1007A
31.31.4 Classification of income 1007B
32non-dIscrIMInAtIon
(ArtIcLe 24 of oecd Mc)
32.1 Introduction 1008
32.2 the word discrimination 1009
32.3 Non-discrimination clauses in oECd Model convention 1011
32.4 oECd Model Commentary 2014 on Article 24 1013
32.5 Procedure to identify discrimination 1020
32.6 reverse discrimination 1021
32.7 Comparison between concept of differentiation and discrimination 1021
32.8 Various expression used in non-discrimination clauses 1023
32.9 some relevant criteria to infer discrimination 1030
32.10 the views of the Indian court on Non-discrimination Clauses in dtAAs 1033
PAGE
CoNtENts I-50
33treAty shoPPInG
33.1 Introduction 1040
33.2 definition 1041
33.2.1 Circumstances when treaty shopping may occur 1043
33.2.2 treaty shopping considered as undesirable 1044
33.3 different categories of treaty shopping (or treaty abuse) 1044
33.4 Consequences of treaty shopping 1048
33.5 Measures to prevent treating shopping 1049
33.6 treaty shopping as seen in Azadi Bachao Andolan’s Case 1050
33.7 treaty shopping as viewed in other Indian cases 1053
34tAX sPArInG
34.1 Introduction 1061
34.1.1 objective of tax sparing provision 1062
34.1.2 Comments by Vogel on tax sparing 1062
34.2 Illustration 1062
34.3 tax sparing provision in Indo-France dtAA 1063
34.3.1 reciprocal tax sparing provision in Indo-France dtAA 1064
34.4 rational of “tax sparing” provisions in tax treaties 1065
34.5 “tax sparing” mechanism and exemption method 1067
34.5.1 Capital neutrality 1067
34.5.2 Moral consideration 1068
34.5.3 tax sparing provisions and industrial growth 1068
34.6 Alternative mechanism of “tax sparing” 1068
34.7 “tax sparing” mechanism 1069
34.8 Abuse of “tax sparing” provisions 1071
34.9 “tax sparing” provisions in certain tax treaties 1074
PAGE
I-51 CoNtENts
35tAX evAsIon And tAX AvoIdAnce
35.1 Introduction 1087
35.1.1 “tax evasion” 1087
35.1.2 tax Avoidance 1087
35.1.3 tax mitigation 1088
35.1.4 Principles regarding tax Avoidance and tax Evasion 1088
35.1.5 tax Avoidance under Australian Income-tax Act 1089
35.2 tax evasion - Various practices 1090
35.3 tax avoidance - Various practices 1091
35.4 Concepts leading to tax avoidance 1094
35.5 difference between tax planning and colourable device 1106
35.6 the concept of Form vs. substance 1107
35.7 tax evasion and tax avoidance in the eyes of the Courts 1108
35.8 Underlying principles as per various judgments of the Courts 1117
36doubLe tAXAtIon/doubLe non-tAXAtIon
36.1 Introduction 1120
36.1.1 scope of double taxation 1121
36.1.2 the problems arising from double taxation 1121
36.1.3 double Non-taxation 1122
36.2 reasons of double non-taxation 1123
36.2.1 disadvantages of double non-taxation 1126
36.3 double taxation under domestic laws 1126
36.3.1 whether double taxation is permissible 1127
36.3.2 double taxation under International Law 1128
36.3.3 Elimination of double taxation 1129
36.4 Exemption method 1131
36.4.1 oECd Model: Article - 23A: Exemption method 1131
36.4.2 Credit Method 1132
36.5 Article 23B of oECd MC-Credit Method 1133
PAGE
CoNtENts I-52
36.6 Advantages, disadvantages and specifications of Credit method 1133
36.7 Elimination of double taxation under United Nations Model double taxation Convention between developed and developing countries 1136
36.7.1 Article 23A - Exemption method 1136
36.7.2 Article 23B - Credit method 1136
36.8 Key decisions 1138
37InterPretAtIon of stAtutes
And tAX treAtIes
37.1 Introduction 1142
37.2 Interpretation of taxing statutes 1143
37.3 Commonly accepted principles of interpretation of taxing statutes 1146
37.4 Interpretation of tax treaties 1185
38WIthhoLdInG tAX
38.1 Introduction 1203
38.2 Nature of withholding tax liability 1203
38.3 Ingredients of section 195 1204
38.3.1 Ingredient of section 195 1205
38.3.2 the ingredients in tabular form 1206
38.4 the term “Any Person” 1206
38.4.1 Key decisions 1207
38.5 sum Chargeable 1208
38.5.1 Nature of withholding tax 1208
38.5.2 section 195 and section 172 1210
38.5.3 Examples of sum chargeable to tax 1210
38.5.4 Examples of sum not chargeable to tax 1214
38.5.5 who is to decide about chargeability? 1221
38.6 time of deduction of withholding tax 1224
PAGE
I-53 CoNtENts
38.7 sum covered u/s 195(1) 1226
38.8 rates in force 1227
38.9 surcharge/Education Cess 1228
38.10 No deduction or lower deduction of withholding tax at source 1230
38.10.1 section 195(2) of Income-tax Act 1230
38.10.2 section 195(3) of Income-tax Act 1231
38.10.3 the difference between section 195(2) and section 195(3) 1232
38.11 section 197 of Income-tax Act 1232
38.12 section 195A of Income-tax Act 1233
38.13 section 206AA of Income-tax Act 1233
38.14 Consequence of failure to withhold tax 1238
38.15 Effect of Amendment by Finance Act, 2012 1241
38.16 Amendment by Finance Act, 2015 1242
38.16.1 highlights of rule 37BB 1242
38.17 Amendment by Finance Act, 2016 1243
38.17.1 Equalisation levy 1243
39LIMItAtIon of benefIt ruLe
39.1 Introduction 1245
39.2 treaty shopping 1246
39.3 LoB rule 1247
39.4 LoB rule in Us Model Convention 1247
39.5 derivative Benefits 1254
39.6 LoB Clauses in dtAAs of India with other countries 1254
39.7 some key decisions on LoB issue 1258
40tAX hAvens
40.1 Introduction 1261
40.2 history of tax havens 1262
40.3 Key characteristics of a tax haven 1263
PAGE
CoNtENts I-54
40.4 types of tax havens 1264
40.5 Forms of tax avoidance/tax evasion in tax havens 1264
40.6 Incentives to be come tax haven 1265
40.7 Effect of tax haven Countries on world Economy 1266
40.8 the reasons for popularity of tax haven countries 1268
40.9 Measures against tax haven countries and tax competition 1270
40.10 Features of different tax haven countries 1271
41treAty overrIde
41.1 Introduction 128541.2 Kinds of treaty override 1286
41.2.1 Interpretative overrides 128741.2.2 Non-material treaty overrides 128841.2.3 Prospective override 129041.2.4 substantive override 129041.2.5 other classification 1290
41.3 Justification of treaty override 129241.3.1 to Prevent treaty abuse or treaty shopping 129241.3.2 Non-co-operative approach of Contracting
partner 129341.3.3 to narrow the gap between Professed and un-
intended benefits vis-a-vis the actual benefits 129441.3.4 Application of domestic anti-avoidance rule 1294
41.4 Justification against treaty override legislation 129541.5 Juridical approach on treaty override 1296
41.5.1 Conflict between dtAA and It provision 129741.5.2 treaty override through It Amendment 129741.5.3 Absence of a provision in dtAA 129941.5.4 treaty override and Non-discrimination 1300
42thIn cAPItALIzAtIon
42.1 Introduction 1304
42.1.1 thin Capitalization and transfer Pricing 1304
PAGE
I-55 CoNtENts
42.2 Checks against thin capitalization 1305
42.3 the benefits of thin capitalization 1306
42.4 difference between debt and equity 1306
42.5 thin Capitalization Provisions in oECd Model tax Convention 1307
42.5.1 “Interest” as per Klaus Vogel on double taxation Conventions 1308
42.6 Impact of thin capitalization on tax and dividend 1308
42.7 Approaches in thin capitalization rules 1309
42.7.1 Arm’s length approach 1310
42.7.2 the ratio approach 1310
42.8 Various practices to increase debt equity ratio 1311
42.9 thin capitalization rules in different countries 1313
43benefIcIAL oWnershIP
43.1 Introduction 1324
43.1.1 the objective of Beneficial ownership provisions 1325
43.2 Ingredient of beneficial ownership 1326
43.3 Beneficial ownership definitions 1327
43.4 Beneficial ownership as per Black’s law dictionary 1328
43.5 Beneficial ownership as per some foreign authorities 1329
43.6 Examples of beneficial owner 1330
43.7 Nature of Beneficial ownership 1331
43.8 Legal ownership vs. Beneficial ownership 1331
43.9 Concept of Beneficial ownership in India 1332
43.10 history of “beneficial ownership” in oECd MC 1333
43.11 oECd Model Commentary (Para 4 on Article 12) 1334
43.12 Key Notes in oECd MC 1335
43.12.1 Full right to use and enjoy the income uncons- trained by a contractual/legal obligation 1336
43.13 Application, or diversion of income in beneficial ownership 1336
43.14 Look through approach; piercing the veil of the company; substance over the form 1339
43.15 the concept of piercing the corporate veil 1341
PAGE
CoNtENts I-56
43.16 substance over the form 1342
43.17 some key views on beneficial ownership concept 1343
43.18 Foreign Case Laws 1344
43.19 the concept of beneficial ownership under Indian tax laws 1359
44MutuAL AGreeMent Procedure
(ArtIcLe 25 of oecd Mc)
44.1 As per oECd Model Convention 1361
44.2 relevant Points from oECd Model Commentary 2014 1362
44.3 scope of Mutual Agreement Procedure 1369
44.4 Procedure of MAP - Indian Law 1369
44.5 Procedure of availing remedy 1370
44.6 Merits and when desirable 1370
44.7 Key decisions 1371
45eXchAnGe of InforMAtIon
(ArtIcLe 26 of oecd Mc)
45.1 Introduction 1373
45.2 Article 26 of oECd MC 1373
45.3 objects of Article 26 and Explanation of various paragraphs as per the oECd MC Commentary 2014 on Article 26 1375
45.3.1 the objects of exchange information 1375
45.3.2 Explanation of Paragraph 1 1375
45.3.3 Explanation of Paragraph 2 1377
45.3.4 Explanation of Paragraph 3 1378
45.3.5 Explanation of Paragraph 4 1380
45.3.6 Explanation of Paragraph 5 1381
45.4 New points in the oECd Model Commentary 2014 1382
45.5 some relevant points in the context of Exchange of Information 1384
45.6 other Issues 1390
45.7 some Key decisions on this issue 1391
PAGE
I-57 CoNtENts
46AssIstAnce In the coLLectIon of tAXes
(ArtIcLe 27 of oecd Mc)
46.1 Introduction 1393
46.2 Article 27 of oECd MC 1393
46.3 oECd Model Commentary 2014 on Article 27 1395
46.3.1 Key points from Commentary 1395
46.3.2 Paragraph 1: Basic rule 1397
46.3.3 Paragraph 2: defining “Revenue Claim” 1398
46.3.4 Paragraph 3 : Enforceable revenue Claims 1398
46.3.5 Paragraph 4 : Measure of Conservancy 1399
46.3.6 Paragraph 5: time limits and Priority 1400
46.3.7 Paragraph 6: Proceedings with respect to its existence, validity or amount 1401
46.3.8 Paragraph 7: suspension or withdrawal of the request 1401
46.3.9 Paragraph 8: Limitations of requested state 1401
46.4 Comparison between oECd, UN and Us Models 1402
46.5 how assistance can be provided? 1402
46.6 Cases where Article 27 is not included in the dtAA 1403
46.7 scope of Article 27 in different dtAAs 1403
47MeMbers of dIPLoMAtIc MIssIons And
consuLAr Posts (ArtIcLe 28 of oecd Mc)
47.1 Article 28 1405
47.2 relevant points from the oECd Model Commentary 2014 on Article 28 1405
47.3 Key Concepts 1406
47.4 Cases where there is no provision like Article 28 in the dtAA 1407
47.5 treatment stated in Vienna Convention on diplomatic relations 1407
47.6 Understanding the Expressions 1409
PAGE
CoNtENts I-58
47.7 In the event of death of member of the mission 1410
47.8 taxability of diplomats under Indian Income-tax Act 1410
47.9 International organisations and their personnel 1411
48terrItorIAL eXtensIon (ArtIcLe 29 of oecd Mc)
48.1 Introduction 1412
48.2 relevant points from the oECd Model Commentary 2014 on Article 29 1412
49entry Into force
(ArtIcLe 30 of oecd Mc)
49.1 Introduction 1414
49.2 Article 30 of oECd MC regarding “Entry into force” 1414
49.3 relevant points from the oECd Model Commentary 2014 1414
49.4 other relevant points 1415
49.5 Meaning of the expression ‘ratification’ 1417
49.6 the procedure for a treaty to come into force 1418
49.7 Publication in official Gazette 1418
49.8 Key decisions 1418
50terMInAtIon (ArtIcLe 31 of oecd Mc)
50.1 Introduction 1423
50.2 Article 31 of oECd MC 1423
50.3 Explanation of the Article as per Commentary 1423
50.4 Article as per Explanatory Notes to oECd MC 2014 1424
50.5 Purpose to be served by the termination Clause 1424
50.6 whether Notice of termination once given may be withdrawn unilaterally? 1425
50.7 Conformity and divergence 1425
50.8 Vienna Convention on Law of treaties 1425
KEy words 1427