A proposal by Japan Tobacco International's Mauritius operation to increase its stake in its Indian arm from 50% to 74% has come under fire from several sides.
The proposed increase, currently under consideration by India's Foreign Investment Promotion Board (FIPB), has been cautioned against by the Finance Ministry, which argued that allowing such a move would constitute a tacit approval of 'treaty shopping', a particular bugbear of the Indian authorities when it comes to companies routing investment via Mauritius.
The tax treaty between Mauritius and India, which had underpinned the emergence of Mauritius as the dominant channel for foreign direct investment (FDI) into India, first came under attack from Indian tax authorities in 2002 as a result of alleged abuses by Indian-resident investors, and has been a source of controversy ever since.
In addition to the objections to the proposed stake increase from a tax point of view, the Health Ministry has also weighed in, calling for tougher FDI restrictions on tobacco manufacture, or even a complete ban on foreign investment in the sector.
The matter is being reviewed by the cabinet, but the outcome for Japan Tobacco International specifically, and for the tobacco manufacturing sector generally, remains uncertain.
.
Network Tweets Archive
| Resources | Partners
| Site Map | Links
| Newsletter
Archive | Contact
| RSS Feeds
About | Syndication |
Advertising & Marketing |
Recruitment |
Terms & Conditions |
Privacy
Copyright © 2012 - All Rights Reserved - Tax-News.com
All content provided by BSI Media
IMPORTANT NOTICE: Tax-News.com has taken reasonable care in sourcing and presenting the information contained on this site, but accepts no responsibility for any financial or other loss or damage that may result from its use. In particular, users of the site are advised to take appropriate professional advice before committing themselves to involvement in offshore jurisdictions, offshore trusts or offshore investments.
Write a comment