India, Mauritius locked in GAAR stalemate: Sources

CNBC-TV18's Rituparna Bhuyan reports, quoting sources, that talks regarding the exemption of GAAR between Mauritius and India have reached a deadlock as both refuse to change their stance

Rituparna Bhuyan, Reporter ,CNBC-TV18

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Talks regarding the exemption of GAAR between Mauritius and India have reached a deadlock as both refuse to change their stance, reports CNBC-TV18's Rituparna Bhuyan, quoting sources.

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In April, the Mauritius Prime Minister wrote to Prime Minister Manmohan Singh proposing that Mauritian companies with tax residency certificates should be exempt from GAAR provisions. According to sources, the Indian government rejected the proposal.

The Mauritian authorities were informed by the Indian tax authorities that GAAR was not specific to any country and providing a country-specific exemption would not be appropriate as per international norms.

However, the Indian tax authorities assured the Mauritian government about the embedded safeguards in the GAAR provisions which will apply only to those arrangements which specifically seek to avoid payment of tax.

Any further development in the stalemate is hoped to emerge from the meeting of the joint working group in August.

Also Read: Breakthrough in India, Mauritius negotiations unlikely soon

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