The Government of India (‘GoI’) and Government of Mauritius signed a protocol dated May 10, 2016, amending the Protocol to the India – Mauritius Double Taxation Avoidance Agreement, which, inter alia, provides for:

i. Withdrawal of the capital gains tax exemption available to Mauritian residents with respect to shares in Indian resident companies acquired on or after April 1, 2017 in a phased manner as follows:

•   Capital gains arising on or after April 1, 2017 till March 31, 2019 (‘Transition Period’) will be taxed at 50% of the applicable Indian domestic tax rate subject to fulfilment of certain conditions; and

•   Capital gains arising after the Transition Period will be taxed in India as per India’s full domestic tax rate;

ii. Introduction of concepts of ‘service permanent establishment’, fee for technical services sourced in India and derived by Mauritian residents to be taxed at the rate of 10% on gross basis, and income in the nature of ‘other income’ of a Mauritian resident to be taxed as per India’s domestic tax laws.