Amendment In Act ≠ Amendment In Treaty

Recently, the Mumbai Income-tax Appellate Tribunal (the Tribunal) in the case of WNS North America Inc., has held (in relation to the retrospective amendment to the definition of ‘royalty’) that any amendment in the provision of the Income-tax Act does not have the effect of automatically altering the analogous provisions of the Double Taxation Avoidance Agreement (tax treaty). If the retrospective amendment is in respect of a provision for which there is no contrary provision in the tax treaty, then such an amendment will have effect even under the treaty and vice-a-versa. This alert by PwC summarizes this order of the Mumbai ITAT.

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