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The Union Cabinet on Friday approved an agreement between India and the Hong Kong Special Administrative Region (HKSAR) of China for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to taxes on income.
This is expected to augment flow of investment, technology and personnel from India to HKSAR and vice versa, prevent double taxation and provide for exchange of information, said an official statement.
The statement said the pact “will improve transparency in tax matters and will help curb tax evasion and tax avoidance.”
Under Section 90 of the Income-Tax Act, 1961 the government is authorised to enter into an Agreement with a foreign country or specified territory for avoidance of double taxation of income, for exchange of information for the prevention of evasion or avoidance of income-tax chargeable under the Act.
Pact with Kyrgyz Republic The Cabinet also gave its nod to amending the DTAA and prevention of fiscal prevention evasion pact with Kyrgyz Republic in order to facilitate greater exchange of information to the “widest possible extent” thereby empowering the Indian government to use the information received for law enforcement purposes.
“Amended agreement provides that the State from which information is requested cannot deny information on the ground that it has no domestic tax interest in that information or that the information requested is held by a bank or a financial institution, etc,” a release said.
The government also gave green signal for signing the Joint Interpretative Declaration (JID) between India and Colombia regarding the existing Agreement for the Promotion and Protection of Investments between India and Colombia signed on November 10, 2009.
JIDs play a crucial role in strengthening the investment treaty regime.
“With increasing Bilateral Investment Treaty (BIT) disputes, issuance of such statements is likely to have strong persuasive value before arbitration tribunals. Such pro-active approach by partners can foster a more predictable and coherent reading of treaty terms by arbitration tribunals,” the statement added.
In another decision, the Cabinet okayed appointment of Second National Judicial Pay Commission (SNJPC) for Subordinate Judiciary in the country. It also approved establishment of an Exhibition-cum-Convention Centre at Dwarka, New Delhi.
The Cabinet also gave its approval on continuing and restructuring National Rural Drinking Water Programme (NRDWP) to make it outcome-based, competitive and better monitored with increased focus on sustainability of schemes to ensure good quality service delivery to the rural population.
Creation of a National Testing Agency (NTA) was also approved by the Cabinet as an autonomous and self-sustained premier testing organization to conduct entrance examinations for higher educational institutions.
The NTA will be chaired by an eminent educationist appointed by MHRD, the CEO will be the Director General to be appointed by the government. Besides, there will be a Board of Governors comprising members from user institutions. The DG will be assisted by nine verticals headed by academicians and experts.
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