Air Services and Tax Agreement: Impact on Bilateral Ties Between India and Seychelles

Air Services and Tax Agreement: Impact on Bilateral Ties Between India and Seychelles

Question : Union Cabinet has given approval for revised Air Services Agreement as well as tax agreement between India and Seychelles. Discuss how this will impact bilateral relations between the two countries.

Air Services Agreement: Impact

- Union Cabinet has provided approval for revised Air Services Agreement between India and Seychelles for modernisation and updation of existing ASA

- ASA implies a significant landmark in civil aviation relations between Seychelles and India

- This also has a potential to spur more trade apart from promoting tourism and cultural exchanges between the two nations

- This has led to greater connectivity between India and Seychelles with flights increasing from 4 to 7 per week

Taxes Agreement: Impact

- Union Cabinet has approved the signing and ratification of agreement between India and Seychelles for information exchange with respect to taxes

- Agreement stimulates flow of information exchange between India and Seychelles for tax purposes to curb tax evasion and avoidance

Agreement has the following salient features :

- Competent authorities of India and Seychelles will provide assistance through information exchange relevant to administration and enforcement of domestic laws pertaining to to the 2 countries regarding tax covered by the agreement

Information gotten under the agreement will be treated as secret and disclosed to persons or authorities concerned with the following:

- Assessment

- Collection

- Enforcement

- Prosecution

- Determination of appeals

- This is in regard to taxes covered as per the agreement

- Information is to be disclosed to persons or entity only with prior written consent of the nation sending the information

- The agreement also provides for a Mutual Agreement Procedure for resolution of differences or procedural agreements

- Agreement will enter into force from the date of notification of procedure completion in regard to respective laws of the two nations for entry into force of the agreement

- Agreement does not bear any financial implications

Facts and Stats

- Agreement was entered into with a foreign country or specified territory for information exchange for prevention or income tax avoidance or tax evasion

India and Seychelles have also agreed to the text of the agreement and similar bilateral agreements have been signed between the nation and the following countries:

- Argentina,

- Bahamas,

- Bahrain,

- Belize,

- Bermuda,

- British Virgin Islands,

- Cayman Islands,

- Gibraltar,

- Guernsey,

- Isle of Man,

- Jersey,

- Liberia,

- Liechtenstein,

- Macao,

- Monaco

- San Marino.