Indian court confirms that Mauritian tax residency certificate is sufficient to access tax treaty benefits

India’s Punjab and Haryana High Court on August 26 ruled that Blackstone Mauritius and Barclays Mauritius are residents of Mauritius, and thus may take advantage of the India-Mauritius tax treaty, even though the companies’ only tie to Mauritius was through being issued a certificate of tax residence by the Mauritius government.

As a result, the Court said, no capital gains tax was payable by the companies upon their sale of shares in an Indian company, SKR BPO. Moreover, the purchaser of the shares, Serco, was not required to withhold tax on the purchase payment.

In so concluding, the Court followed Supreme Court precedent in Union of India v. Azadi Bachao Andolan.

The Court rejected the government’s argument that the case involved treaty shopping and that the shareholders of the Mauritius companies were the real beneficiaries of the sale.

See:

• Serco v. Authority for Advance Rulings