Mauritius 'unwillingness' delays tax treaty revision: Government

NEW DELHI: The government today said Mauritius was "unwilling" to bring in safeguards to prevent the misuse of taxation treaty between the two nations.

A joint working group comprising members of the two governments was constituted in 2006 to put in place adequate safeguards to prevent misuse of the India-Mauritius Double Taxation Avoidance Convention.

"Seven rounds of discussion have taken place so far. There was unwillingness on the part of Mauritius to cooperate in addressing this problem," Minister of State for Finance S S Palanimanickam said in a written reply in Lok Sabha.

"Consistent efforts are being made by Indian government to find mutually acceptable solutions for addressing India's concerns. Next round of JWG meeting is yet to be scheduled," he said.

There is growing concern that many entities are routing their investments into the country through Mauritius to reap undue tax benefits.

The Government of India has proposed to review the DTAC to incorporate amendments to the DTAC for prevention of treaty abuse and to strengthen the mechanism for exchange of information on tax matters between India and Mauritius. The review will help India to raise revenue from these foreign investments in the country.