THE world
of International Taxation is as ancient as the history of Independent India.
No sooner India was declared Independent as per the
India
Indepdence Act, 1947 on August 15, the FIRST Double Taxation
Avoidance Agreement (DTAA) was born on December 10, 1947,
with the new Dominon
of Pakistan. That is another issue that this Tax Treaty is not
in force but it does mark the beginning of the DTAA-journey for India. In
the '50s India did very little on the DTAA front. Only towards the end of
the decade India signed one Agreement with Sweden
in 1959, followed by Japan and
Germany in
1960. A couple of DTAAs were signed in the '60s but the real spurt was seen
only in the late '70s, '80s and '90s. Even with the UK, India signed its
first
DTAA
in 1981. The United States of America (USA) which has emerged as one
of India's biggest trading partners, entered into an Agreement only
in 1990 - barely days before India's then Prime Minister P V Narasimha
Rao embarked on radical era of economic liberalisation in
1991. Since then the landscape of international taxation has only seen expansion
and evolution in India.
Let's
now move away from the turf of history and go straight to the Apex Court
decision in the case of Azadi Bachao Andolan (2003-TII-02-SC-INTL).
This case marks a turning point for the rapidly-evolving legal jurisprudence
in the world of taxation of cross-border transactions. Although the country
involved was Mauritius (culturally speaking, a look-alike for India) but
it is common knowledge that Mauritius has been one of the hottest destinations
for treaty-shoppers from the Developed World. Anyway, the allegations and
the reality apart, our Apex Court laid down vital ratios for interpreting
the deep-seated nuances of various phrases and expressions used in Articles
of the DTAA with Mauritius. The law decided in this case became a universally
accepted legal tool for other forums of the judiciary in India and elsewhere
in the world to decide DTAA-related litigation.
After Azadi
Bachao,
one may come across a virtual flood of cases relating to DTAAs with the Netherlands,
Singapore, the USA, the UK, France, Belgium and others. The decade of 2000
witnessed a sharp rise in the number of judicial decisions with respect
to various Articles of largely similar DTAAs India had signed over the decade.
Initially, most of the disputes used to partake the character of an Liaison
Office and Permanent Establishment (Article 5); then came a phase of royalty
and fees for technical services related disputes (largely Article 12); followed
by a colourful basket of disputes relating to Articles 8, 10, 13, 14, 15,
17, 26 & 27. This virtual flood perhaps coaxed the authors of the First
Edition of the latest Book - Mr Rajesh Kadakia and Nilesh Modi -
in 2008 to design a handy and reliable tool for the legal practitioners of
international taxation. A sustained and systemic effort led to the selection
of as many as 860 judicial decisions. And this number has now shot up to
about 1300. So has zoomed the number of pages from 895 to 1352.
A
quick look at both the Editions reveals that what was commenced as an adventure
in law has finally culminated into an intellectual venture with insightful
commentaries and the elegance of user-friendly references on contentious
issues. As the Maxim goes - the taste of the pudding lies in the eating,
one needs to go inside this Edition to see how
meticulously it has been arranged and the same can be measured from the fact
that the author has devoted one chapter to each Article plus one for the
introduction to tax treaties - thus, there are 31 Chapters in
this treatise. Leaving no stone unturned the author has accommodated all
possible contents available on the subject right from the CAG Report to CBDT
Circulars and Instructions to global jurisprudence - a good amount of legal
wisdom from the USA and Australia has been provided adequate space in this
Edition. The author has painstakingly given pertinent references to both
the tax conventions - the UN and the OECD Models.
As
regards the growing involvement of India in shaping up the global taxation
model through the UN and the OECD, the Author has taken pains to provide
adequate coverage to its commentaries. Ever since the financial tsunami hit
the global world and provided a new WINDOW to the G-7 Leadership to see the
world of tax havens differently, the world of bilateral tax treaties started
providing space
to Tax Information Exchange Agreements (TIEAs). India has also signed a few.
Then came the phase of amending DTAA through Protocols to accommodate Article
28 in relation to exchange of information. Picking up threads of new developments
worldwide India also decided to frame General Anti-Avoidance Rules (GAAR).
For effective sharing of banking information and also to collect vital intelligence,
India decided to set up some Overseas Units where taxmen could be posted.
All these recent developments have been accommodated in this Edition
apart from lucid commentaries on divergent judicial viewpoints on vital
issues.
There
are certainly many more interesting features of this Edition but it would
be wise on my part to leave them for the inquisitiveness of the readers to
look for them and earn a 'Vasco da Gamian' sense of exploration
and interpolation. In a nutshell, the Second Edition evidently reflects the
sleepless nights of hardwork the author has put in to make it more meaningful
and user-friendly. To conclude it,
|
