DTAA BETWEEN INDIA
& SRI LANKA
Agreement For Avoidance Of Double Taxation
And Prevention Of Fiscal Evasion With Sri Lanka
Whereas the annexed Convention between the
Government of the Republic of India and the Government of the Democratic
Socialist Republic of Sri Lanka for the avoidance of double taxation and the
prevention of fiscal evasion with respect to taxes on income and on capital has
been ratified and the instruments of ratification exchanged as required by
article 29 of the said Convention ;
Now, therefore, in exercise of the powers
conferred by section 90 of the Income-tax Act, 1961 (43 of 1961), and section
24A of the Companies (Profits) Surtax Act, 1964 (7 of 1964), the Central
Government hereby directs that all the provisions of the said Convention shall
be given effect to in the Union of India.
Notification : No. GSR 342(E), dated
19-4-1983.
SAARC Limited Multilateral Agreement
(For detail click here)
TEXT OF CONVENTION, DATED 27-1-1982
The Government of the Republic of India
and the Government of the Democratic Socialist Republic of Sri Lanka desiring
to conclude a Convention for the avoidance of double taxation and the
prevention of fiscal evasion with respect to taxes on income and on capital,
have agreed as follows :
ARTICLE 1 - Personal scope - This
Convention shall apply to persons who are residents of one or both of the
Contracting States.
ARTICLE 2 - Taxes covered - 1. This
Convention shall apply to taxes on income and on capital imposed on behalf of
each Contracting State irrespective of the manner in which they are levied.
2. There shall be regarded as taxes on
income and on capital all taxes imposed on total income, on total capital, or
on elements of income or of capital including taxes on gains from the
alienation of movable or immovable property as well as taxes on capital
appreciation.
3. The existing taxes to which this
Convention shall apply are :
(a) In Sri Lanka—
(i) the income-tax, including the
income-tax based on the turnover of enterprises licensed by the Greater Colombo
Economic Commission ; and
(ii) the wealth-tax;
(hereinafter referred to as “Sri Lanka tax”).
(b) In India—
(i) the income-tax including any
surcharge thereon;
(ii) the surtax ; and
(iii) the wealth-tax ; (hereinafter
referred to as “Indian tax”).
4. This Convention shall also apply to any
identical or substantially similar taxes which are imposed after the date of
signature of this Convention in addition to, or in place of, the existing
taxes. The competent authorities of the Contracting States shall notify each
other of any important changes which have been made in their respective
taxation laws.
ARTICLE 3 - General definitions - 1. In
this Convention, unless the context otherwise requires:
(a) the terms “ a Contracting State”
and “the other Contracting State” mean Sri Lanka or India as the context
requires;
(b) the term “person” includes an
individual, a company and any other body of persons;
(c) the term “company” means any
body corporate or any entity which is treated as a body corporate for the tax
purposes ;
(d) the terms “enterprise of a
Contracting State” and “enterprise of the other Contracting State” mean respectively
an enterprise carried on by a resident of a Contracting State and an enterprise
carried on by a resident of the other Contracting State ;
(e) the term “international traffic”
means any transport by a ship or aircraft operated by an enterprise which has
its place of effective management in a Contracting State, except when the ship
or aircraft is operated solely between places in the other Contracting State ;
(f) the term “national” means :
(i) an individual possessing the
nationality of a Contracting State ;
(ii) a legal person, partnership or
an association deriving its status as such from the laws in force in a
Contracting State ;
(g) the term “competent authority”
means :
(i) in the case of Sri Lanka, the
Commissioner-General of Inland Revenue;
(ii) in the case of India, the
Central Government in the Ministry of Finance (Department of Revenue).
2. As regards the application of this
Convention by a Contracting State any term not defined therein shall, unless
the context otherwise requires, have the meaning which it has under the laws of
that State relating to the taxes which are the subject of this Convention.
ARTICLE 4 - Fiscal domicile - 1. For the
purposes of this Convention, the term “resident of a Contracting State” means
any person who, under the law of that State, is liable to tax therein by reason
of his domicile, residence, place of management or any other criterion of a
similar nature. But this term does not include any person who is liable to tax
in that State in respect only of income from sources in that State or capital
situated therein.
2. Where by reason of the provisions of
paragraph (1) of this article an individual is a resident of both Contracting
States, then his status shall be determined as follows :
(a) he shall be deemed to be a
resident of the State in which he has a permanent home available to him. If he
has a permanent home available to him in both States, he shall be deemed to be
a resident of the State with which his personal and economic relations are
closer (centre of vital interests) ;
(b) if the State in which he has his
centre of vital interests cannot be determined, or if he has not a permanent
home available to him in either State he shall be deemed to be a resident of
the State in which he has an habitual abode ;
(c) if he has an habitual abode in
both States or in neither of them, he shall be deemed to be a resident of the
State of which he is a national ;
(d) if he is a national of both
States or of neither of them, the competent authorities of the Contracting
States shall settle the question by mutual agreement.
3. Where by reason of the provisions of
paragraph (1) of this article a person other than an individual is a resident
of both Contracting States, then it shall be deemed to be a resident of the
State in which its place of effective management is situated.
ARTICLE 5 - Permanent establishment - 1.
For the purposes of this Convention, the term “permanent establishment” means a
fixed place of business through which the business of the enterprise is wholly
or partly carried on.
2. The term “permanent establishment”
shall include especially :
(a) a place of management ;
(b) a branch ;
(c) an office ;
(d) a factory ;
(e) a workshop ;
(f) a mine, an oil or gas well, a
quarry or any other place of extraction of natural resources ;
(g) an agricultural or farming
estate or plantation ;
(h) a building site or construction
or assembly project which exists for more than 183 days ;
(i) the furnishing of services,
including consultancy services, by an enterprise through employees or other
personnel, where activities of that nature continue within the country for a
period or periods aggregating more than 183 days within any twelve-month
period.
3. Notwithstanding the preceding
provisions of this article, the term “permanent establishment” shall be deemed
not to include :
(a) the use of facilities solely for
the purpose of storage, display or delivery of goods or merchandise belonging
to the enterprise ;
(b) the maintenance of a stock of
goods or merchandise belonging to the enterprise solely for the purpose of
storage, display or delivery ;
(c) the maintenance of a stock of
goods or merchandise belonging to the enterprise solely for the purpose of
processing by another enterprise ;
(d) the maintenance of a fixed place
of business solely for the purpose of purchasing goods or merchandise or of
collecting information, for the enterprise ; and
(e) the maintenance of a fixed place
of business solely for the purpose of advertising for the supply of information
or for scientific research, being activities solely of a preparatory or
auxiliary character in the trade or business of the enterprise.
4. A person acting in a Contracting State
on behalf of an enterprise of the other Contracting State - other than an agent
of an independent status to whom paragraph (6) of this article applies - shall
be deemed to be a permanent establishment in the first-mentioned State if he
has, and habitually exercises in that State, an authority to conclude contracts
in the name of the enterprise, unless his activities are limited to the
purchase of goods or merchandise for the enterprise.
5. Notwithstanding the preceding
provisions of this article, an insurance enterprise of a Contracting State
shall, except in regard to reinsurance, be deemed to have a permanent
establishment in the other Contracting State if it collects premiums in the
territory of that other State or insures risks situated therein through a
person other than an agent of independent status to whom paragraph (6) of this
article applies.
6. An enterprise of a Contracting State
shall not be deemed to have a permanent establishment in the other Contracting
State merely because it carries on business in that Sate through a broker,
general commission agent or any other agent of an independent status, provided
that such persons are acting in the ordinary course of their business. However,
when the activities of such an agent are devoted wholly or almost wholly on
behalf of that enterprise, he will not be considered an agent of an independent
status within the meaning of this paragraph.
7. The fact that a company which is a
resident of a Contracting State controls or is controlled by a company which is
a resident of the other Contracting State, or which carries on business in that
other State (whether through a permanent establishment or otherwise) shall not
of itself constitute either company a permanent establishment of the other.
ARTICLE 6 - Income from immovable property
- 1. Income from immovable property may be taxed in the Contracting State in
which such property is situated.
2. The term “immovable property” shall
have the meaning which it has under the law of the Contracting State in which
the property in question is situated. The term shall in any case include
property accessory to immovable property, livestock and equipment used in
agriculture and forestry, rights to which the provisions of general law
respecting landed property apply, usufruct of immovable property and rights to
variable or fixed payments as consideration for the working of, or the right to
work, mineral deposits, sources and other natural resources; ships, boats and
aircraft shall not be regarded as immovable property.
3. The provisions of paragraph (1) of this
article shall apply to income derived from the direct use, letting or use in
any other form of immovable property.
4. The provisions of paragraphs (1) and
(3) of this article shall also apply to the income from immovable property of
an enterprise and to income from immovable property used for the performance of
professional services.
ARTICLE 7 - Business profits - 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 :
(a) that permanent establishment,
(b) sales in that other State of
goods or merchandise of the same or similar kind as those sold through that
permanent establishment,
(c) other business activities
carried on in that other State of the same or similar kind as those effected
through that permanent establishment.
The provisions of sub-paragraphs (b) and
(c) above shall not apply if the enterprise proves that such sales or
activities are not attributable to the permanent establishment.
2. Subject to the provisions of paragraph
(3) of this article, where an enterprise of a Contracting State carries on
business in the other Contracting State through a permanent establishment
situated therein, there shall in each Contracting State be attributed to that
permanent establishment the profits which it might be expected to make if it
were a distinct and separate enterprise engaged in the same or similar
activities under the same or similar conditions and dealing wholly
independently with the enterprise of which it is a permanent establishment.
3. In the determination of the profits of
a permanent establishment, there shall be allowed as deduction 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 State in which the permanent establishment is situated or elsewhere.
However, no such deduction shall be allowed in respect of amounts, if any, paid
(otherwise than towards reimbursement of actual expenses) by the permanent
establishment to the head office of the enterprise or any of its other offices,
by way of royalties, fees or other similar payments, in return for the use of
patents or other rights, or by way of commission, for specific services
performed or for management, or, except in the case of a banking enterprise, by
way of interest on money lent to the permanent establishment. Likewise, no
account shall be taken in the determination of the profits of a permanent
establishment, for amounts charged (otherwise than towards reimbursement of
actual expenses), by the permanent establishment to the head office of the
enterprise or any of its other offices by way of royalties, fees or other
similar payments in return for the use of patents or other sights, or by way of
commission for specific services performed or for management, or except in the
case of a banking enterprise by way of interest on money lent to the head
office of the enterprise or any of its other offices.
4. Insofar as it has been customary in a
Contracting State to determine the profits to be attributed to a permanent
establishment on the basis of an apportionment of the total profits of the enterprise
to its various parts nothing in paragraph (2) of this Article shall preclude
that Contracting State from determining the profits to be taxed by such an
apportionment as may be customary ; the method of apportionment shall, however,
be such that the result will be in accordance with the principles contained in
this article.
5. No profits shall be attributed to a
permanent establishment by reason of the mere purchase by that permanent
establishment of goods or merchandise for the enterprise.
6. For the purposes of the preceding
paragraphs, the profits to be attributed to the permanent establishment shall
be determined by the same method year by year unless there is good and
sufficient reason to the contrary.
7. Where profits include items of income
which are dealt with separately in other articles of this Convention, then the
provisions of those articles shall not be affected by the provisions of this
article.
ARTICLE 8 - Shipping and air transport -
1. Profits derived by an enterprise of a Contracting State from the operation
of ships or aircraft in international traffic shall be taxable only in the
Contracting State in which the place of effective management of the enterprise
is situated.
12. Notwithstanding the provisions of
paragraph (1), profits derived from the operation of ships in international
traffic may be taxed in the Contracting State in which such operation is
carried on ; but the tax so charged shall not exceed 50 per cent of the tax
otherwise imposed by the internal law of that State :
Provided that for the purpose of the
calculation of the tax, such profits shall be deemed to be an amount not
exceeding the rates presently provided in the taxation laws of the respective
States for the computation of such profits.
3. The provisions of paragraphs (1) and
(2) of this article shall likewise apply in respect of profits from the
participation in a pool, a joint business or an international operating agency
of any kind by enterprises engaged in the operation of ships or aircraft in
international traffic.
4. For the purpose of paragraph (1),
interest on funds connected with the operation of ships or aircraft in
international traffic shall be regarded as income from the operation of such
aircraft, and the provisions of article 11 shall not apply in relation to such
interest.
5. 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 State in which the home harbour of the ship is situated, or
if there is no such home harbour, in the State of which the operator of the
ship is a resident.
ARTICLE 9 - Associated enterprises - 1. Where—
(a) an enterprise of a Contracting
State participates directly or indirectly in the management, control or capital
of an enterprise of the other Contracting State, or
(b) the same persons participate
directly or indirectly in the management, control or capital of an enterprise
of a Contracting State and an enterprise of the other Contracting State, 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 any profits which would, but for those
conditions have accrued to one of the enterprises, but by reason of those
conditions, have not so accrued, may be included in the profits of that
enterprise and taxed accordingly.
2. Where a Contracting State includes in
the profits of an enterprise of that State and taxes accordingly profits on
which an enterprise of the other Contracting State has been charged to tax in
that other State and the profits so included as profits which would have
accrued to the enterprise of the first-mentioned State if the conditions made
between the two enterprises had been those which would have been made between
the independent enterprises, then that other State shall make an appropriate
adjustment to the amount of the tax charged therein on those profits. In
determining such adjustment, due regard shall be had to the other provisions of
this Convention and the competent authorities of the Contracting States, shall
if necessary, consult each other.
ARTICLE 10 - Dividends - 1. Dividends paid
by a company which is a resident of a Contracting State to a resident of the
other Contracting State may be taxed in that other State.
2. However, such dividends may also be
taxed in the Contracting State of which the company paying the dividends is a
resident and according to the laws of that State, but the tax so charged shall
not exceed 15 per cent of the gross amount of the dividends.
3. The term “dividends” as used in this
article means income from shares, mining shares, founders’ shares or other
rights not being debt-claims, participating in profits, as well as income from
other corporate rights which is subjected to the same taxation treatment as
income from shares by the taxation law of the State of which the company making
the distribution is a resident.
4. The provisions of paragraphs (1) and (2)
of this article shall not apply if the beneficial owner of the dividends, being
a resident of a Contracting State, carries on business in the other Contracting
State of which the company paying the dividends is a resident, through a
permanent establishment situated therein and the holding in respect of which
the dividends are paid is effectively connected with such permanent
establishment. In such case the provisions of article 7 shall apply.
5. Where a company which is a resident of
a Contracting State derives profits or income from the other Contracting State,
that other State may not impose any tax on the dividends paid by the company,
except insofar as such dividends are paid to a resident of that other State or
insofar as the holding in respect of which the dividends are paid is
effectively connected with a permanent establishment situated in that other
State, nor subject the company’s undistributed profits to a tax on
undistributed profits, even if the dividends paid or the undistributed profits
consist wholly or partly of profits or income arising in such other State.
ARTICLE 11 - Interest - 1. Interest
arising in a Contracting State and paid to a resident of the other Contracting
State may be taxed in that other State.
2. However, such interest may also be
taxed in the Contracting State in which it arises and according to the laws of
that State, but if the recipient is the beneficial owner of the interest the
tax so charged shall not exceed 10 per cent of the gross amount of the
interest.
3. Notwithstanding the provisions of
paragraph (2) of this article interest arising in a Contracting State shall be
exempt from tax in that State if :
(a) the payer of the interest is the
Government of that Contracting State or a local authority thereof, or
(b) the interest is paid to the
Government of the other Contracting State or local authority thereof or any
agency or instrumentality (including a financial institution) wholly owned by
that other Contracting State or local authority thereof.
4. The term “interest” as used in this
article means income from Government securities, bonds or debentures, whether
or not secured by mortgage and whether or not carrying a right to participate
in profits, and debt-claims of every kind as well as all other income
assimilated to income from money lent by the taxation law of the State in which
the income arises.
5. The provisions of paragraphs (1) to (3)
of this article shall not apply if the beneficial owner of the interest, being
a resident of a Contracting State, carries on business in the other Contracting
State in which the interest arises through a permanent establishment situated
therein and the debt-claim in respect of which the interest is paid is
effectively connected with such permanent establishment. In such case, the
provisions of article 7 shall apply.
6. Interest shall be deemed to arise in a
Contracting State when the payer is that State itself, a local authority or a
resident of that State. Where, however, the person paying the interest, whether
he is a resident of a Contracting State or not, has in a Contracting State a
permanent establishment in connection with which the indebtedness on which the
interest is paid was incurred, and interest is borne by such permanent
establishment, then such interest shall be deemed to arise in the Contracting
State in which the permanent establishment is situated.
7. Where, by reason of a special
relationship between the payer and the beneficial owner or between both of them
and some other person, the amount of the interest, having regard to the
debt-claim for which it is paid, exceeds the amount which would have been
agreed upon by the payer and the beneficial owner in the absence of such
relationship, the provisions of this article shall apply only to the last-mentioned
amount. In such a case, the excess part of the payments shall remain taxable
according to the laws of each Contracting State, due regard being had to the
other provisions of this Convention.
ARTICLE 12 - Royalties - 1. Royalties
arising in a Contracting State and paid to a resident of the other Contracting
State may be taxed in that other State.
2. However, such royalties may also be
taxed in the Contracting State in which they arise and according to the laws of
that State, but if the recipient is the beneficial owner of the royalty, the
tax so charged shall not exceed 10 per cent of the gross amount of the
royalties.
3. 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 any copyright of literary, artistic or scientific work
including cinematograph films, or tapes for television or broadcasting any
patent, trade-mark, design or model, plan, secret formula or process, or for
the use of, or the right to use industrial, commercial or scientific equipment,
or for information concerning industrial, commercial or scientific experience.
4. The provisions of paragraphs (1) and
(2) of this article shall not apply if the beneficial owner of the royalties,
being a resident of a Contracting State, carries on business in the other
Contracting State in which the royalties arise, through a permanent
establishment situated therein and the right or property in respect of which the
royalties are paid is effectively connected with such permanent establishment.
In such a case the provisions of article 7 shall apply.
5. Royalties shall be deemed to arise in a
Contracting State when the payer is that State itself, a local authority or a
resident of that State. Where, however, the person paying the royalties,
whether he is a resident of a Contracting State or not, has in a Contracting
State a permanent establishment in connection with which the liability to pay
the royalties was incurred, and such royalties are borne by such permanent
establishment, then such royalties shall be deemed to arise in the State in
which the permanent establishment is situated.
6. Where by reason of a special
relationship between the payer and the beneficial owner or between both of them
and some other person, the amount of the royalties having regard to the use,
right or information for which they are paid exceeds the amount which would
have been agreed upon by the payer and the beneficial owner in the absence of
such relationship, the provisions of this article shall apply only to the
last-mentioned amount. In such a case, the excess part of the payment shall
remain taxable according to the laws of each Contracting State, due regard
being had to the other provisions of this Convention.
ARTICLE 13 - Capital gains - 1. Gains
derived by a resident of a Contracting State from the alienation of immovable
property referred to in paragraph (2) of Article 6 and situated in the other
Contracting State may be taxed in that other State.
2. Gains from the alienation of immovable
property forming part of the business property of a permanent establishment
which an enterprise of a Contracting State has in the other Contracting State
(including such gains from the alienation of such a permanent establishment
alone or with the whole enterprise) may be taxed in that other State.
3. Gains from the alienation of ships or
aircraft operated in international traffic or movable property pertaining to
the operation of such ships or aircraft shall be taxable only in the
Contracting State in which the place of effective management of the enterprise
is situated.
4. Gains from the alienation of
stocks/shares of a company may be taxed in the Contracting State in which they
have been issued.
5. Gains from the alienation of any
property other than that referred to in paragraphs (1) to (4) of this Article,
shall be taxable only in the Contracting State of which the alienator is a
resident.
6. The term “alienation” means the sale,
exchange, transfer, or relinquishment of the property or the extinguishment of
any rights therein or the compulsory acquisition hereof under any law in force
in the respective Contracting States.
ARTICLE 14 - Independent personal services
- 1. Income derived by a resident of a Contracting State in respect of
professional services or other activities of an independent character shall be
taxable only in that State unless his stay in the other Contracting State is
for a period or periods exceeding in the aggregate 120 days within any 12 month
period, when such income may also be taxed in the other Contracting State.
2. The term “professional services”
includes independent scientific, literary, artistic, educational or teaching
activities, as well as the independent activities of physicians, lawyers,
engineers, architects, dentists and accountants.
ARTICLE 15 - Dependent personal services -
1. Subject to the provisions of articles 16, 18 and 19, salaries, wages and
other similar remuneration derived by a resident of a Contracting State in respect
of an employment is exercisable only in that State unless the employment is
exercised in the other Contracting State. If the employment is so exercised,
such remuneration as is derived there from, may be taxed in that other
Contracting State.
2. Notwithstanding the provisions of
paragraph (1), remuneration derived by a resident of a Contracting State in
respect of an employment exercised in the other Contracting State shall be
taxable only in the first-mentioned State if—
(a) the recipient is present in
other State for a period or periods not exceeding in the aggregate 183 days
within any 12-month period ; and
(b) the remuneration is paid by, or
on behalf of, an employer who is not a resident of the other State ; and
(c) the remuneration is not borne by
a permanent establishment or a fixed base, which the employer has in the other
State.
3. Notwithstanding the preceding
provisions of this article, remuneration in respect of an employment exercised
aboard a ship or aircraft in international traffic, may be taxed only in the
Contracting State in which the place of effective management of the enterprise
is situated.
ARTICLE 16 - Directors’ fees - Directors’ fees and other similar payments
derived by a resident of a Contracting State in his capacity as a member of the
board of directors of a company which is a resident of the other Contracting
State may be taxed in that other State.
ARTICLE 17 - Artistes and athletes -
1. Notwithstanding the provisions of articles 14 and 15 income derived by public
entertainers (such as theatre, motion picture, radio or television artistes and
musicians) or athletes, from their personal activities as such may be taxed in
the Contracting State in which these activities are exercised :
Provided that such income shall not
be taxed in the Contracting State if the visit of the public entertainers or
athletes to that State is directly or indirectly supported wholly or
substantially, from the public funds of the Government of the other Contracting
State.
2. Where income in respect of
personal activities exercised by an entertainer or an athlete in his capacity as
such accrues not to the entertainer or athlete himself but to another person,
that income may, notwithstanding the provisions of articles 7, 14 and 15 be
taxed in the Contracting State in which the activities of the entertainer or
athlete are exercised.
3. For the purposes of this article,
the term “Government” includes a State Government, a political sub-division or a
local authority of either Contracting State.
ARTICLE 18 - Government service - 1.
(a) Remuneration other than a pension, paid by the Government of a Contracting
State to an individual in respect of services rendered to that State or a local
authority thereof shall be taxable only in that State.
(b) However, such remuneration shall
be taxable only in the other Contracting State if the services are rendered in
that other State and the individual is resident of that State who—
(i) is a national of that State, or
(ii) did not become a resident of
that State solely for the purpose of rendering the services.
2. Any pension paid by the Government
of one of the Contracting States to any individual may be taxed in that
Contracting State.
3. The provisions of articles 15, 16
and 19 shall apply to remuneration and pensions in respect of services rendered
in connection with a business carried on by a Contracting State or a local
authority thereof.
4. For the purposes of this article,
the term “Government” shall include any State Government or local authority of
either Contracting State, the Reserve Bank of India and the Central Bank of
Ceylon.
ARTICLE 19 - Non-Government pensions
and annuities - 1. Any pension (other than a pension referred to in article 18)
or annuity derived by a resident of a Contracting State from sources within the
other Contracting State may be taxed only in the first-mentioned Contracting
State.
2. The term “pension” means a
periodic payment made in consideration of services rendered in the past or by
way of compensation for injuries received in the course of performance of
services.
3. The term “annuity” means stated
sum payable periodically at stated times during life or during a specified or
ascertainable period of time, under an obligation to make the payments in return
for adequate and full consideration in money or money’s worth.
ARTICLE 20 - Professors and teachers
- A professor or teacher who makes a temporary visit to a Contracting State for
a period not exceeding two years for the purpose of teaching or conducting
research at a university, college, school or other educational institution, and
who is, or immediately before such visit was a resident of the other Contracting
State shall be exempt from tax in the first-mentioned Contracting State in
respect of remuneration for such teaching or research.
ARTICLE 21 - Students and apprentices
- 1. Payments which a student or business apprentice who is or was immediately
before visiting a Contracting State, a resident of the other Contracting State
and who is present in the first-mentioned State solely for the purpose of his
education or training receives for the purpose of his maintenance, education or
training shall not be taxed in that State, provided that such payments arise
from sources outside that State.
2. In respect to grants, scholarships
and remuneration from employment not covered by paragraph (1) of this article a
student or business apprentice described in paragraph (1) of this article shall,
in addition, be entitled during such education or training to the same
exemptions, relief’s or reductions in respect of taxes available to residents of
the State which he is visiting.
ARTICLE 22 - Other income - Items of income of a resident of a Contracting State
which are not expressly mentioned in the foregoing article of this agreement in
respect of which he is subject to tax in that State shall be taxable only in
that State.
ARTICLE 23 - Capital - 1. Capital
represented by immovable property referred to in paragraph (2) of article 6 may
be taxed in the Contracting State in which such property is situated.
2. Capital represented by movable
property forming part of the business property of a permanent establishment of
an enterprise may be taxed in the Contracting State in which the permanent
establishment is situated.
3. Notwithstanding the provisions of
paragraph (2) of this article, ships and aircraft operated in international
traffic and movable property pertaining to the operation of such ships and
aircraft, shall be taxable only in the Contracting State in which the place of
effective management of the enterprise is situated.
4. All other elements of capital of a
resident of a Contracting State shall be taxable only in that State.
ARTICLE 24 - Elimination of double taxation - 1. The laws in force in either of the Contracting States shall continue to govern the taxation of income and capital in the respective Contracting States except when express provision to the contrary is made in this Convention. When income or capital is subject to tax in both Contracting States, relief from double taxation shall be given in accordance with the following paragraphs of this article.
2. Subject to the provisions of the
law of India regarding the allowance as a credit against Indian tax of tax
payable in a territory outside India (which shall not affect the general
principle hereof) Sri Lanka tax payable under the law of Sri Lanka and in
accordance with this Convention whether directly or by deduction on profits,
income or chargeable gains from sources within Sri Lanka (excluding in the case
of a dividend, tax payable in respect of the profits out of which the dividend
is paid) or capital in Sri Lanka shall be allowed as a credit against any Indian
tax computed by reference to the same items of income or capital by reference to
which the Sri Lanka tax is computed :
Provided that such credit shall not
exceed Indian tax (as computed before allowing any such credit), which is
appropriate to the income derived from sources within Sri Lanka or to capital in
Sri Lanka, so however, that where such resident is a company by which surtax is
payable in India, the credit aforesaid shall be allowed in the first instance
against income-tax payable by the company in India, and as to the balance if any
against surtax payable by it in India.
3. For the purposes of paragraph (2)
of this article, the term “Sri Lanka tax payable” shall be deemed to include any
amount which would have been payable as Sri Lanka tax for any year but for an
exemption or reduction of tax granted for that year or any part thereof under :
(a) any of the following provisions,
that is to say sections 11, 16, 17, 18, 19, 20, 21, 22 and 85 of the Sri Lanka
Inland Revenue Act No. 28 of 1979 so far as they were in force on, and have not
been modified since, the date of the signature of this Convention, or have been
modified only in minor respects so as not to affect their general character; or
(b) any agreement entered into under
section 17 of the Greater Colombo Economic Commission Law No. 4 of 1978; or
(c) any other provisions which may
subsequently be made granting an exemption or reduction of tax which is agreed
by the competent authorities to be of a substantially similar character, if it
has not been modified thereafter or has been modified only in minor respects so
as not to affect its general character.
4. Subject to the provisions of the
law of Sri Lanka regarding the allowance as a credit against Sri Lanka tax of
tax payable in a territory outside Sri Lanka (which shall not affect the general
principle hereof) Indian tax payable under the law of India and in accordance
with the Convention, whether directly or by deduction, on profits, income or
chargeable gains from sources within India (excluding in the case of a dividend,
tax payable in respect of the profits out of which the dividend is paid) or
capital in India shall be allowed as a credit against any Sri Lanka tax computed
by reference to the same items of income or capital by reference to which the
Sri Lanka tax is computed:
Provided that such credit shall not
exceed Sri Lanka tax (as computed before allowing any such credit), which is
appropriate to the income derived from sources within India or to capital in
India.
5. For the purpose of paragraph (4)
of this article, the term “Indian tax payable” shall be deemed to include any
amount which would have been payable as Indian tax for any year but for an
exemption or reduction of tax granted for that year or any part thereof under:
(a) any of the following provisions,
that is to say, sections 10(4), 10(4A), 10(15)(iv), 32A, 33A, 35C, 54E, 80CC,
80HH, 80J, 80K of the Income-tax Act, 1961; or
(b) any other provisions which may
subsequently be made granting an exemption or reduction of tax which is agreed
by the competent authorities to be of a substantially similar character if it
has not been modified thereafter or has been modified only in minor respects so
as not to affect its general character.
ARTICLE 25 - Non-discrimination - 1.
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 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.
2. 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 residents of the other Contracting State any personal
allowances, relief’s and reductions for taxation purposes on account of civil
status or family responsibilities which it grants to its own residents.
3. Except where the provisions of
paragraph (1) of article 9, paragraph (7) 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. Similarly, any debts of an enterprise of a
Contracting State to a resident of the other Contracting State shall, for the
purpose of determining the taxable capital of such enterprise, be deductible
under the same conditions as if they had been contracted to a resident of the
first-mentioned State.
4. 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.
5. The provisions of this article
shall, notwithstanding the provisions of article 2, apply to taxes of every kind
and description.
ARTICLE 26 - Mutual agreement
procedure - 1. Where a person considers that the actions of one or both of the
Contracting States result or will result for him in taxation not in accordance
with the provisions of this Convention, he may, irrespective of the remedies
provided by the domestic law of those States, present his case to the competent
authority of the Contracting State of which he is a resident or, if his case
comes under paragraph (1) of article 25 to that of the Contracting State of
which he is a national. The case must be presented within three years from the
first notification of the action resulting in taxation not in accordance with
the provisions of the Convention.
2. The competent authority shall
endeavour, if the objection appears to it to be justified and if it is not
itself able to arrive at a satisfactory solution, to resolve the case by mutual
agreement with the competent authority of the other Contracting State, with a
view to the avoidance of taxation which is not in accordance with the
Convention. Any agreement reached shall be implemented notwithstanding any time
limits in the domestic law of the Contracting States.
3. The competent authorities of the
Contracting States shall endeavour to resolve by mutual agreement any
difficulties or doubts arising as to the interpretation or application of the
Convention. They may also consult together for the elimination of double
taxation in cases not provided for in the Convention.
4. The competent authorities of the
Contracting States may communicate with each other directly for the purpose of
reaching an agreement in the sense of the preceding paragraphs. The competent
authorities, through consultations, shall develop appropriate bilateral
procedures, conditions, methods and techniques for the implementation of the
mutual agreement procedure provided for in this article. In addition, a
competent authority may devise appropriate unilateral procedures, conditions,
methods and techniques to facilitate the above-mentioned bilateral actions and
the implementation of the mutual agreement procedure.
ARTICLE 27 - Exchange of information
- 1. The competent authorities of the Contracting States shall exchange such
information as is necessary for carrying out the provisions of this Convention
or of the domestic laws of the Contracting States concerning taxes covered by
the Convention, insofar as the taxation there under is not contrary to the
Convention in particular for the prevention of fraud or evasion of such taxes.
The exchange of information is not restricted by article 1. Any information
received by a Contracting State shall be treated as secret in the same manner as
information obtained under the domestic laws of that State. However, if the
information is originally regarded as secret in the transmitting State it shall
be disclosed only to persons or authorities (including courts and administrative
bodies) involved in the assessment or collection of, the enforcement or
prosecution in respect of, or the determination of appeals in relation to, the
taxes which are the subject of the Convention. Such persons or authorities shall
use the information only for such purposes but may disclose the information in
public court proceedings or in judicial decisions. The competent authorities
shall through consultation develop appropriate conditions, methods and
techniques concerning the matters in respect of which such exchanges of
information shall be made, including, where appropriate, exchanges of
information regarding tax avoidance.
2. In no case shall the provisions of
paragraph (1) be construed so as to impose on a Contracting State the
obligation—
(a) to carry out administrative
measures at variance with the laws and administrative practice of that or of the
other Contracting State;
(b) to supply information which is
not obtainable under the laws or in the normal course of the administration of
that or of the other Contracting State;
(c) 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.
ARTICLE 28 - Diplomatic agents and
consular officials - Nothing in this Convention shall affect the fiscal
privileges of diplomatic agents or consular officials under the general rules of
international law or under the provisions of special agreements.
ARTICLE 29 - Entry into force - 1. This convention shall be ratified and the
instruments of ratification shall be exchanged at Colombo as soon as possible.
2. The Convention shall enter into
force upon the exchange of instruments of ratification and its provisions shall
have effect—
(a) in Sri Lanka—
(i) in respect of income assessable
for any year of assessment commencing on or after 1st April, 1980;
(ii) in respect of capital
assessable for any year of assessment commencing on or after 1st April, 1980.
(b) in India—
(i) in respect of income assessable
for any year of assessment commencing on or after 1st April, 1981;
(ii) in respect of capital
assessable for any year of assessment commencing on or after 1st April, 1980.
3. The agreement between the
Government of Ceylon and the Government of India or relief from or the avoidance
of double taxation of income, signed on 10th September, 1956, shall terminate
and cease to have effect as respects taxes on income to which the present
Convention applies in accordance with the provisions of paragraph (2) of this
Article.
ARTICLE 30 - Termination - This
Convention shall remain in force indefinitely but either Contracting State may,
on or before June 30 in any calendar year beginning after the expiration of a
period of five years from the date of its entry into force, give to the other
Contracting State, through diplomatic channels, written notice of termination.
In such event, the Convention shall
cease to have effect—
(a) in Sri Lanka—
(i) in respect of income assessable
for any year of assessment commencing on or after 1st April in the calendar year
next following that in which such notice is given;
(ii) in respect of capital
assessable for any year of assessment commencing on or after 1st April in the
calendar year next following that in which such notice is given.
(b) in India—
(i) in respect of income assessable
for the assessment year commencing on the 1st day of April in the second
calendar year next following the calendar year in which the notice is given, and
subsequent years;
(ii) in respect of capital
assessable for any year of assessment commencing on or after 1st April in the
calendar year next following that in which such notice is given.
IN WITNESS WHEREOF the undersigned,
duly authorised thereto, have signed this Convention.
DONE in duplicate at New Delhi this
27th day of January, 1982, in the Sinhala, Hindi and English languages, all
texts being equally authentic. In the case of divergence of interpretations the
English text shall prevail.
JUDICIAL ANALYSIS
Amount of tax attributable to
income-tax in a country means the tax actually payable in that country—O.A.P.
Andiappan v. CIT [1971] 82 ITR 876 (SC).
Agreement with Ceylon allows only
abatement of tax and not total exemption—A.C. Paul v. CIT [1974] 97 ITR 652
(Mad.).
Mere failure to produce ‘finality
certificate’ is not enough to deny assessee relief from double taxation—A.S.
Sivan Pillai v. CIT [1960] 40 ITR 450 (Mad.).
Revenue should allow an abatement
equal to lower of amounts of tax attributable to such excess in either
country—CIT v. V.S. Sivalingam Chettiar [1972]86 ITR 772 (Mad.)/CIT v. S.K.
Srinivasan [1970] 75 ITR 93 (Mad.).
Under article III of agreement
between India and Ceylon abatement is equal to lower of two taxes on the same
income—M. Abubacker v. CIT [1968] 69 ITR 809 (Ker.).
Ceylon income-tax for the purpose of
double income-tax relief would be tax as computed under section 20(7) of the
Ceylon Income-tax Ordinance less the deduction under section 45(4)(b)(ii) of
that Ordinance—CIT v. Madras Palyakai Co. (P.) Ltd. [1969] 74 ITR 642 (Mad.).
------------------------------------
UPDATES
STRATEGIES INDO SRI
LANKA TRADE
December 3rd, 2013. At some stage or
the other the people of Sri Lanka would
need to sit down and carefully deliberate over exactly what and who contributed
and continues to contribute towards steadily reversing the great victory of the
Ranaviru in defeating terrorism in Sri
Lanka in May 2009. Some agreements
that had either been authored or agreed to sign on behalf of Sri
Lanka have virtually sealed Sri
Lanka ’s fate. Before we accuse
external sources of attempting to destabilize the country we need to look
inward, without bias and identify objectively from a country-centric point of
view the persons who had been responsible for the troubles that Sri
Lanka now faces. It is in identifying
who these architects were and their dangerous prescriptions that we might be
able to avert future disasters flowing from these or similar ideas.
Indo-Lanka Accord
Who were those privy to the clauses
of this Accord signed under duress with Sri Lanka’s cabinet having been forced
to give undated letters of resignation – why would such lengths need to be taken
wherein even the media was debarred?
Where were the objections to India giving
LTTE Rs. 50 million? Where were Sri
Lanka ’s objections to India ’s
breach of the Accord when India as
undertaken did not disarm LTTE in 120 hrs? When Sri
Lanka ’s obligation to adhere to the
Accord was conditional on India ’s
performance and implementation of 5 key steps why did Sri
Lanka not repudiate the Accord or
raise diplomatic objections when India failed
to perform its part of its obligations under the Accord? Why did no official
point out provisions of the Accord India had explicitly violated? The demand to
pull back Sri Lanka ’s
military from the Northern Province started
with the Indo-Lanka Accord – it is because Sri
Lanka did not make its stand clear
then that this same call is being repeated now.
On what grounds did Sri
Lanka ’s representatives privy to the
clauses of the Accord before it was signed not object to the merger of the North
and East, why did they not question the assertion and false claim of a Tamil
Homeland instead of accepting everything India had
written? There is no such “areas of historical habitation of Sri Lankan Tamil
speaking people, who have at all times hitherto lived together in this
territory”. Why was there no one to question how a Provincial Council system
could solve problems? and why did no one object to Sri Lanka’s problem being
defined ‘ethnic’ – when people are having arms to kill and assassinate people
how can they be defined anything other than terrorists? Not a single effort is
being taken to erase reference to Sri
Lanka having an ‘ethnic problem’ – Sri
Lanka had a terrorist problem. There
is no legitimate reasons that can claim Sri
Lanka ’s problem is ‘ethnic’.
Why did Sri Lanka’s leaders not
insist on India’s compliance with the hallowed and oldest International Law
principle ‘pacta sunt servanda’ (i.e. agreements must be kept) and that both
parties must execute their mutually agreed obligations in good faith – we can
confidently say that India was in full breach of its obligations under the
Accord without protest without challenge from Sri Lanka – it is still not late
to raise this cry loud and clear. Timidity, meekness and moral cowardice closely
associated with those who conduct our international affairs under the cloak of ‘
statesmanship’ carries this country nowhere.
What or who is stopping this defunct
Indo-Lanka Accord been nullified even now?
1995 Draft Constitution
This draft constitution was known as
the Neelan-GL draft. The same draft was amended by Chandrika in 2000. The
devolution package idea being promoted was federalism as their solution. It was
designed, worded and crafted by the duo and this forms the basis of another
dangerous idea that has materialized and come to be accepted as another solution
concocted by our very own. Not many of our own can fiddle around with words and
come up with terminology and the very same man emerges before e very
catastrophic document drafted thus e.g. the unitary state of Sri Lanka being
broken up into a collection of territorial pieces under a new nomenclature of a
UNION OF REGIONS instead of a straight forward federal state it was coined to
fool the populace into accepting the new theory as solution.
“The new constitution that is in the process of being drafted will contain an elaborate chapter on devolution. We are convinced that a substantial degree of devolution represents the key to the most vexed problem confronting the Sri Lankan nation at this time”….. “Devolution is a good thing, a democratic thing,” — Prof. G.L. Peiris
Cease Fire Agreement 2002
Who advocated the theory of ‘unwinnable war’ and championed
publicly the policy of appeasement whatever provocations from terrorists?
Who knowingly advised a democratic country to enter into an
Agreement with terrorists and sign on a piece of paper that gave an
internationally proscribed terrorist organization a status on par with a
sovereign state?
Who supported the removal of checkpoints that gave terrorists
freedom of movement without considering the repercussions of such?
Who requested a lifting of the ban on the LTTE that Foreign
Minister Kadirgamar worked so hard to achieve and shamelessly addressed Anton
Balasingham in servile fashion as ‘Your Excellency”
Who declared the 2002 Agreement was a
‘roadmap to peace’? – incidentally Madam Maria Carriilho, EU member of
parliament declared that the CFA will invariably lead to a new autonomous State,
a flag and new anthem and no one in the UNF even protested over this outrageous
declaration.
The architects were those who
contributed to drafting the 2002 Cease Fire Agreement (CFA) which even Dr.
Subramaniam Swamy declared was the outcome of a ‘surrender mentality’ of the UNF
Government which was prepared to hand over large chunks of vital Sri Lankan
territory to terrorists in return for the money of a few billion of dollars
being dangled as carrot by the western powers including Norway, USA, and Japan
among others.
What was the quid pro quo that
allowed the ‘architects’ to betray the nation under the CFA?
Who did not mind the LTTE committing
more than 10,000 ceasefire violations?
Who cared not to take action against
the LTTE for killing 174 security forces personnel, 388 civilians, 117 attempted
murders, 620 abductions, 46 attempted abductions, 106 cases of extortion, 2199
conscriptions, 875 injuries to persons, 22 instances of torture, 128 cases of
intimidations and recruitment of 1200 children?
Who did not care to equate a
terrorist organization to be on par with a legally established armed forces that
protects the nation?
What type of people agrees to sign an
agreement that grants LTTE official recognition through the CFA as ‘equal
stakeholders”
Who were the Architects and people
involved with the 2002 CFA?
Government Chief Negotiator – GL
Peiris
Defence Minister – Tilak Marapana “I
have no intention at all in waging war with the LTTE at the moment. We have
embarked on a peace mission and our target today, and my role as Defence
Minister, is not to plan strategy to attack but merely to ready ourselves to
defend”
Secretary Defense (Dec 2001) – Austin Fernandohttp://groundviews.org/2008/11/02/interview-with-austin-fernando-a-peacetime-secretary-of-defence-in-sri-lanka/
Chief Spokesman/Secretary for the UNF
– Bradman Weerakoon later to be the Secretary to the PM and thereon to ICES NGO
Head of S L Peace Secretariat –
Bernard Goonetilake and Jayantha Dhanapala
Deputy Director General, Peace
Secretariat in Colombo ,
Dr. John Gunaratne
Head, LTTE Peace Secretariat, S.
Puleedevan
Head, SLMM, Tryggve Tel lefssen
Army Commander – Gen. Balagalle (25
Aug 2000 – 30
Jun 2004 )
SL Legal – Lakshman Marasinghe
Did these architects not have an iota
of love for their country and respect for its armed forces that it forced our
armed forces to give guard of honour to terrorists, shake hands with killers and
thereby humiliated the armed forces in front of these terrorists while
restricting our army to the barracks while giving free access and freedom of
movement to LTTE that led to the assassination of Sri Lanka’s intelligence
members, Police Officers and even Sri Lanka’s intensely popular Foreign Minister
Hon. Lakshman Kadirgamar.
Do these architects not have a word
of praise and gratitude to Maj. Muthalif, Lt. Col. Rizvi Meedin and their teams
who were gunned down in cold blood in broad daylight one after the other in
Colombo?
Do these architects not have a sense
of self-guilt for knowing that the agreement they endorsed perhaps even wrote
allowed the LTTE to smuggle shipments of arms, sophisticated telecommunications
through Sri Lanka’s own customs and these officials allowed them to be brought
into the country and transported to the LTTE through Govt. controlled roads and
highways?
Have these architects not sealed Sri
Lanka
Interim Self-Governing Authority (ISGA)
If the 2002 cease fire agreement
placed a terrorist organization on par with a legitimate government and its
armed forces the next fatal attraction became the ISGA submitted by the LTTE
attempting to legalize what was provisionally established through the CFA. The
fatal attraction here became USD5billion and the race between who would secure
this carrot irrespective of whether the ISGA was to seal Sri
Lanka ’s fate.
It must be reiterated with special
mention and due acknowledgement that it was the JVP, JHU and the patriotic
forces that brought to light to Sri Lanka’s public the dangers of signing the
ISGA with the LTTE alongside Lakshman Kadirgamar (reference speech at Brookings
Institute Washington) – had it not bee n for them it would have been signed thus
sealing another nail to the country’s coffin.
These examples are shown to make the
readers ponder over whether they are going to give these very people another
mandate for them to establish various mechanisms e.g. Commissions of Inquiry
that will prescribe solutions to reverse the gains of the Ranaviru and create
the conditions in the country for another LTTE type terrorist movement to rise.
When 32 countries had banned the LTTE
and knowing LTTE’s modus operandi why would Sri Lanka’s leaders agree to a
proposal by the LTTE that accepted Tamil armed struggle was in ‘self-defense’,
was there no one privy to the clauses on the Sri Lankan Government side to ask
how LTTE can clai m self-defense for killing Lakshman Kadirgamar, Alfred
Duraiappah and over 250 other Tamil learned people? Were Sri
Lanka ’s representatives blind to agree
to giving LTTE appointees absolute majority over Sinhala and Muslim communities
through the ISGA? Why did not a single GOSL representative object to the ISGA
being composed of LTTE, Muslim and GOSL which purposely excluded mention of
Sinhalese that comprised 74% of the populace?
Did Sri
Lanka ’s representatives become so
mesmerized by USD5million that they completely chose to ignore to question what
would arise if LTTE were to make all appointments to the ISGA District
Committees and it would administer all State land, financial affairs, judicial
affairs, development, economic.
The people who represented Sri
Lanka at these discussions and agreed
or silently stood by and watched these agreements take place none of them should
be allowed anywhere near current policy making decisions of Sri
Lanka .
If we are having calls for land and
police to be given to the provinces did these not stem from some of these
dangerous advice and opinions that were allowed over time to take shape and pose
dangerous challenges to the preservation of national unity and territorial
integrity of Sri Lanka?
Who are these supposed leaders who
agreed to a proposal by the LTTE that would give LTTE rule of law, ability to
collect taxes, run the administration, deal with external players, conduct trade
and in lieu of all this LTTE agrees to drop calls for an independent Tamil Eelam?
Has the LTTE not hoodwinked our leaders because in agreeing to all these ISGA
demands our people would have given Eelam (similar to the manner in which the
Indian Parliament in 1947 voted and agreed to the partition of India ,
creating a new nation i.e. Pakistan ,)
and there would be no reason for LTTE to demand an independent Eelam. Can our
people have been so stupid?
From Indo-Lanka Accord, the CFA, the
ISGA we now come to another dangerous agreement agreed by our so called leaders.
We again mention the JVP, JHU and the patriotic forces for bringing to the
attention of the public the hidden dangers of this P – TOMS structure
disregarding the silence of the mainstream media.
Leaders and their advisors need to
first clearly realize that in being elected to represent Sri
Lanka they are not voted to barter the
country, divide it into pieces simply because some party or group is dangling
something that catches their fancy. They can do whatever they like with their
own private property but when it comes to the country and a population of
20million people they need to act with integrity, morals and ethics and keeping
in mind they are only custodians for an elected term, and not owners of the land
for an indefinite period of time. We must remember that the country cannot
function to suit individual whims and fancies and certainly not to meet personal
agendas and ideologies that public officials believe in. They certainly have no
right to change legal and constitutional provisions interpreting them to their
fancy and shoving down our throats by crafty legislation influencing leaders who
have no practical legal background or knowledge to accept their version as the
only path to safety.
The PTOM carrot this time was
USD3billion and the Chandrika Government signed the PTOMs on 24
Jun 2005 . Yet, why was the South excluded from
this package for did the South not fall victim to the tsunami as well? For the
third time GOSL and LTTE were placed on par with each other. The same mistake
was again repeated with the PTOMS committee comprising of 1 nominee from LTTE, 1
nominee for Muslims and 1 nominee for GOSL – again no mention of Sinhalese. The
Regional Committee of the PTOMS was structured as such again to make LTTE the
majority on the Committee.
The issue we need to raise is that
these leaders and public officials have agreed to or simply ignored gross
violations of Sri Lanka’s sovereignty, territorial int egrity been torn to
shreds by agreements that some of them had even authored. These are the
dangerous ideas that have taken Sri
Lanka to face a plethora of issues
currently faced. If US and Japan refused
to supply funds to the PTOMS in view of LTTE being proscribed why did our own
leaders ignore this all important fact? But people who claimed PTOMS was ‘the
only way out’ (Kumar Rupesinghe) now says something totally opposite as a
Government advisor – but how many of him are there in Government whose views are
dangerous for we don’t know when they will change them.
Thankfully the Supreme Court decision
of a bench of judges led by Sarath Silva C.J. on 15th
July 2005 on the backdrop of excellent
submissions made by H L De Silva, SL Gunasekera, Gomin Dayasri, Minoli Jinadasa
and Manohara de Silva resulted in the staying of the MOU.
What the people of Sri
Lanka need to now realize is that the
same handful of people have been gradually legitimizing the LTTE behind our
backs. The CFA and all the architects that endorsed it placed a democratically
elected government on par with a terrorist organization. Ranil-Chandrika went on
to committing similar blunders but they did so not alone. There were a group of
people around them who were advising them and it is these people who now need to
be exposed in the best and long term interest of the country. Some of these main
players are leading the present leaders down the wrong garden path.
Similarly, Sri
Lanka has committed itself to numerous
economic agreements that are proving dangerous to Sri
Lanka ’s strategic interests as a
sovereign nation. Who in his right mind gives Sri
Lanka ’s strategic assets and locations
to the very country that clandestinely trained Sri Lankan militants on its soil
and allowed their state to be initially used as a terrorist logistic base?
Knowing that LTTE remnants are around and continuing to give this same country
whose operatives are known to be functioning in Sri Lanka makes one to ask what
dangers are we knowingly walking towards and taking the populace to another
episode of terror.
These dangerous ideas combined with
the fatal attractions of these people have taken the country from one calamity
to another.
People need to know who these
architects were for the same people continue to brainwash our national leaders
with more dangerous ideas and advice inducing our national leaders to accept the
former’s fancy notions by bringing in foreign parties and institutions that
claim to save our leaders from war crimes and promising them that their scalp
can b e saved if they agree to make a commitment to establishing Commissions of
Inquiry that will subtly condemn and insinuate those that defend the nation –
both armed and unarmed (armed forces and the patriotic citizens). The
Commissions are a subtle way to legitimize their objectives while poisoning the
minds of the leaders into submission by putting the fear of Moses into them that
their lives are at risk if war crimes charges are brought. This is nothing else
but bribing the minds of our leaders into submission – we would like to know who
these guilty parties are.
Such a quick fix was the LLRC which
is continuing to boomerang on Sri Lanka for
we seem to be asked to implement solutions to problems we are unaware of. Who
plugged the LLRC and used that to project that Sri
Lanka could escape trial in Geneva ?
Who is now plugging another Commission on the pretext of saving the head s of Sri
Lanka ’s leaders? Who is committing our
leaders to endorsing another Commission titled this time as Truth and
Reconciliation when we defeated a terrorist movement and our story is different?
The public could not stop LLRC becoming a suicidal effort but the public can put
a full stop to another bogus Commission being introduced – whatever goes without
saying is that it is now time that we expose the handful of people who are
abusing their office to push agendas because their feet are not in Sri Lanka,
their allegiance is not to Sri Lanka and certainly no loyalty to the country’s
leaders – it is a good time for the leaders themselves to seriously wonder who
they can actually trust.
It is also good for the leaders to
realize that none of the patriotic forces have ever advised leaders wrongly or
given advice to usurp them from power or place the nation and its people in
difficulty. Here lies the difference in the architects of the dangerous ideas
who surround leaders and th e patriotism of people who are often kept
marginalized.
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UPDATES
Cabinet approves India-Sri Lanka double taxation avoidance
treaty – 12th February, 2020
Cabinet approves protocol amending the Agreement between
India and Sri Lanka for avoidance of double taxation and the prevention of
fiscal evasion with respect to taxes on income.
The Union Cabinet, chaired by the Prime Minister Shri
Narendra Modi, has approved the Signing and Ratification of the Protocol
amending the Agreement between India and Sri Lanka for the avoidance of double
taxation and the prevention of fiscal evasion with respect to taxes on income.
Highlights
Under the amendment, an anti-abuse provision is to be
included. Also, the amendment will include Principle Purpose Test. This will
help in curbing strategies that exploit gaps in tax rules.
Significance
Both Indian and Sri Lanka are members of major multilateral
organizations such as OECD, G20, BEPS. Therefore, it is essential for both the
countries to implement standards based on Multilateral Convention to Implement
Tax Treaty related measures.
Why Principle Purpose Test?
India is a signatory of MLI, whereas Sri Lanka is not.
Therefore, it is essential for the countries to insert Principle Purpose Test
to meet the minimum standards.
Impact
Updation of preamble text and inclusion of Principal Purpose
Test, a general anti abuse provision in the Double Taxation Avoidance Agreement
(DTAA) will result in curbing of tax planning strategies which exploit gaps and
mismatches in tax rules.
Details
1. The existing DTAA between India and Sri Lanka was signed
on 22nd January, 2013 and entered into force on 22nd October, 2013.
2. India and Sri Lanka are members of the Inclusive Framework
and as such are required to implement the minimum standards under G-20 OECD
BEPS Action Reports in respect of their DTAAs with Inclusive Framework
countries. Minimum standards under BEPS Action 6 can be met through the
Multilateral Convention to Implement Tax Treaty Related Measures to Prevent
Base Erosion and Profit Shifting (MLI) or through agreement bilaterally.
3. India is a signatory to the MLI. However, Sri Lanka is not
a signatory to the MLI as of now. Therefore, amendment of the India-Sri Lanka
DTAA bilaterally is required to update the Preamble and also to insert
Principal Purpose Test (PPT) provisions to meet the minimum standards on treaty
abuse under Action 6 of G-20 OECD Base Erosion & Profit Shifting (BEPS)
Project.
Background
The existing Double Taxation Avoidance Agreement (DTAA)
between India and Sri Lanka was signed on 22nd January, 2013 and entered into
force on 22nd October, 2013. India and Sri Lanka are members of the Inclusive
Framework and as such are required to implement the minimum standards under
G-20 OECD BEPS Action Reports in respect of their DTAAs with Inclusive
Framework countries. Minimum standards under BEPS Action - 6 can be met through
the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent
Base Erosion and Profit Shifting (MLI) or through agreement bilaterally. India
is a signatory to the MLI.
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