The comments of the former Finance Minister of Mauritius have sparked alarm regarding the tax treaty negotiations between India and Mauritius. The former FM Rama Sithanen says he's seen the new protocol and in it Mauritius has given up the right to tax capital gains. If this is true it would have a significant impact of foreign investors investing in India via Mauritius.
The former FM's comments have raised doubts about whether treaty amendments include a Limitation of Benefits clause as well as a change in Article 13 - that takes away the Mauritius' right to tax capital gains. To clarify matters CNBC TV18's Menaka Doshi talks to senior tax lawyer Nishith Desai, who is also acting as counsel to the Mauritius Government in these tax treaty re-negotiations.