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DTAA Between India & Sri Lanka


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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.).


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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 200030 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’s inability to defend itself by committing the nation and its people to a horrid future in a highly truncated small island with a view to serve their own ends? If these were the architects that gave LTTE 95% of their Eelam on a silver platter with the rest planned to be secured through the ISGA and PTOMS how should we treat the architects of the 2002 Ceasefire Agreement – have they done a favor to Sri Lanka as some people were foolish enough to think and thank these architects for their betrayal?

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?

Post-Tsunami Operational Management Structure (P-TOMS)

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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This blog is Created by CA Anil Kumar Jain.