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Nod for tax treaty

The final BEPS project identified 15 actions to address BEPS in a comprehensive manner

Press Trust of India  |  New Delhi 

Piyush Goyal
Piyush Goyal

The Cabinet on Wednesday gave its go ahead for signing of a multilateral convention to implement tax treaty to check evasion by preventing (BEPS).
 
Briefing reporters after the Cabinet meeting, Power Minister said the convention was an outcome of the OECD/Project to tackle through tax planning strategies that exploit gaps and mismatches in tax rules to artificially shift profits to low or no-tax locations, resulting in little or no overall corporate tax being paid.

 
The final project identified 15 actions to address in a comprehensive manner. Implementation of the final Package requires changes to more than 3,000 bilateral tax treaties which will be burdensome and time consuming.
 
In view of the same, the convention was conceived as a multilateral instrument which would swiftly modify all covered bilateral tax treaties (Covered Tax Agreements/CTA) to implement measures. For this purpose, formation of an Ad-hoc Group for the development of such multilateral instrument was endorsed by the Finance Ministers and Central Bank Governors in February 2015.
 
India was part of the Ad Hoc Group of more than 100 countries and jurisdictions from G20, OECD, associates and other interested countries, which worked on an equal footing on the finalisation of the text of the Multilateral Convention, starting May 2015. The convention has been opened for signature as on December 31, 2016 and a first joint signing ceremony is scheduled to be held in Paris on June 7. The Cabinet also approved the signing and ratifying of an agreement between India and Tajikistan on cooperation and sharing of Intelligence in the area of Customs. The agreement will help in availability of information for the prevention and investigation of Customs offences, an official statement said. It is also expected to facilitate trade and ensure efficient clearance of goods traded between the countries.
 
Meanwhile, the Cabinet Committee on Economic Affairs, which was held before the Cabinet meeting,  approved a programme for development of bio pharmaceuticals through industry-academia collaboration entailing investment of Rs 1,500 crore by it over a period of five years. The programme will focus on development of specific products such as vaccines, biotherapeutics, medical devices and diagnostics, an official statement said.
 
The Cabinet also gave its nod to the maternity benefit programme providing Rs 6,000 each to lactating mothers, but restricted the scheme to firstborns only. “A pregnant or lactating woman having her first child will get up to Rs 6,000. Of this, Rs 5,000 will be given by the women and child development ministry in three instalments,”Goyal said.
 
While Goyal maintained that the scheme was for the women having their first child, he added the pilot scheme was applicable for "the first two live births". Pregnant women and lactating mothers are eligible to receive a cash benefit of Rs 5,000 in three instalment through direct benefit transfer from the women and child development ministry.
 
The CCEA also approved a Rs 1,959 crore project for upgrading Porbandar-Dwarka section on the National Highway 8E in Gujarat.
 
"The Cabinet Committee on Economic Affairs, chaired by the Prime Minister Narendra Modi, has approved the development of four-laning of Porbandar-Dwarka Section of NH-8E in Gujarat," the Ministry of Road Transport and Highways said in a statement.
 
The cost of the project is estimated at Rs 1,958.88 crore including cost of land acquisition, resettlement and rehabilitation and other pre-construction activities. The total length of the road to be developed is approximately 118 kms.
 
CCEA also approved amendments to a law for allowing construction of Centre-funded infrastructure projects within the limits of "prohibited area" around protected monuments. The Ancient Monuments and Archaeological Sites and Remains Act will be amended to allow "public work of national importance" in the prohibited areas, Goyal said.

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