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In a move to check generation of black money and curb tax evasion, the Union Cabinet has approved the signing and ratification of the agreement between India and Seychelles for exchange of information with respect to taxes.
It also approved the signing of the revised Air Services Agreement (ASA) between the two countries that would increase the number of flights between the two countries from three to seven per week. The revised pact will update and modernise the existing agreement signed in 1978.
The agreement on information sharing on taxes will enable the two countries to help curb tax evasion and avoidance through exchange of information on administration and enforcement of domestic laws related to taxes covered by the pact, Communications and Information Technology Minister Ravi Shankar Prasad said at a press briefing following the Cabinet meeting chaired by Prime Minister Narendra Modi on Thursday.
“This is part of the ongoing initiative of the Government of India to unearth black money,” he said.
The government has taken various initiatives, including signing of FATCA (Foreign Account Tax Compliance Act) with the USA and enactment of black money law, the Minister pointed out.
“After America, we are also planning to sign such agreements with other countries,” he said.
While the agreement does not have any financial implications, only in the event of extraordinary costs exceeding $500, the Government of India will bear the same, an official release said.
The Air Services Agreement with Seychelles signifies an important landmark in the civil aviation relations between the two countries and has the potential to spur greater trade, investment, tourism and cultural exchanges between the two countries, the release said.
Private airline Jet Airways has a code-share pact — an arrangement whereby airlines sell seats on a single route and for each others' flights to provide passengers with a wider choice of destinations--with the Seychelles national carrier Air Seychelles.
The code-share pact expanded in June now covers nine Indian cities such as New Delhi, Mumbai, Kolkata, Bengaluru, Chennai and Hyderabad.
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