Agreement for avoidance of double taxation between the Govt. of the Czechoslovak Socialist Republic and the Govt. of the Republic of India on co-operation in shipping - 0286 (E) - Income Tax

Agreement for avoidance of double taxation between the Govt. of the Czechoslovak Socialist Republic and the Govt. of the Republic of India on co-operation in shipping Notification Number: 0286 (E) Dated 03-06-1980 Whereas the annexed Agreement between the Government of the Czechoslovak Socialist Republic and the Government of the Republic of India on co-operation in shipping has been concluded; And whereas article 12 of the said Agreement provides for the avoidance of double taxation in respect of taxes on income derived from the freight earnings of Czechoslovak vessels on the basis of reciprocity; Now, therefore, in exercise of the powers conferred by section 90 of the Income-tax Act, 1961 (43 of 1961), and section 24A of the Companies (Profits) Surtax Act, 1964 (7 of 1964), the Central Government hereby directs that the provisions of the said article of the said Agreement shall be given effect to in the Union of India. ANNEXURE Agreement between the Government of the Czechoslovak Socialist Republic and the Government of the Republic of India on co-operation in shipping The Government of the Czechoslovak Socialist Republic and the Government of the Republic of India; Desirous of developing and strengthening maritime relations and shipping services between the two countries; Referring to the Trade and Payments Agreement between both countries dated December 4, 1974; Taking into consideration the recommendations of the Czechoslovak-Indian Committee for Economic, Trade and Technical Co-operation; Taking into account the geographical position of the Czechoslovak Socialist Republic, which being a land-locked country has to make use of the seaports of third countries; Have agreed as follows: Article 1 1. In accordance with article 1 of this Agreement, both field of maritime navigation shall be based on the principles of sovereign equality, national interest and mutual advantage and assistance. 2. The provisions of this Agreement shall be applicable to bilateral shipping between the two Contracting Parties. Article 2 1. In accordance with article 1 of this Agreement, both parties agree to contribute to the participation of their vessels in the carriage of cargo between the two countries in order to assist the promotion of bilateral trade. 2. The Parties will contribute to the development of shipping services between the ports nominated by Czechoslovakia and the ports of India, and develop mutual contacts among their organisations responsible for shipping activities. Article 3 1. The term " vessel " of the Contracting Party shall mean any merchant vessel sailing under the flag of that Party or time chartered by the respective shipping organisations of either Party, in accordance with its laws. 2. This term would exclude warships and fishing vessels of both the Parties. 3. The term " member of the crew " of a merchant vessel shall mean any person actually employed for duties on board during voyage in the service of a vessel included in the crew list. 4. Ports nominated by Czechoslovakia according to Article 2 are ports nominated by the concerned Czechoslovak organisations. Article 4 1. The Contracting Parties agreed to take due note of the geographical position of the Czechoslovak Socialist Republic and the capacity of the Czechoslovak fleet, as well as the necessity resulting therefrom to utilize the transport of goods by vessels of third countries, especially those via whose sea-ports the goods are transhipped and whose ships maintain maritime service between their own ports and ports in India in co-operation with Indian liner companies. 2. In recognition of the abovementioned position both Parties agree to reserve a reasonable share of their national cargo to third flag vessels especially those through whose ports national cargoes get transported. 3. The Contracting Parties further agree that the shipping organisations of the two sides have the right to participate equally in the carriage of national cargoes moving between the two countries, consistent with reservation made under para. (2) above. Article 5 1. The Parties entrust Cechofracht Prague on behalf of Czechoslovak side and the Shipping Corporation of India Limited, Bombay, on behalf of Indian side with the task to co-ordinate the activities resulting from this Agreement. 2. Each national shipping line shall operate and administer its vessels assigned to this service independently and shall assume full responsibility for financial results of such operations as well as for claims which might arise due to the operation of the vessels. 3. Each Party may, if necessary, nominate any other organisation in place of the above by notifying to the other Party. Article 6 Each Party will avoid competition with the fleet of the other in its trade with third countries and desist from such activities as would prejudice the growth and utilisation of the merchant fleet of the other party. Article 7 Each Party may establish a representation for its shipping companies in the territory of the other party in accordance with the laws of that country. Article 8 1. Vessels of either country with or without cargoes therein, will, while entering, staying in or leaving the ports of the other country, enjoy the most favoured facilities granted by their laws, rules and regulations to ships under third countries flags. This principle shall not, however, apply to ships engaged in coastal navigations. 2. The parties shall endeavour to take effective measures aiming at conveyance of assistance to vessels in their ports concerning particularly delivery of bunkers, spare parts, catering, etc., repairs and docking, simple formalities of vessels dispatch and enrolment of crews. Article 9 All ship documents including those relating to nationality registration, tonnage and survey issued or recognised by one Party shall be recognised by the other Party. Article 10 If a vessel of one of the Parties suffers shipwreck, runs aground, is cast ashore or suffers any other accident, the vessel, the cargo, the crew and the passengers shall receive in the territory of the other Party the same assistance which is accorded to its national vessels, cargo, crew and passengers. This will be subject to the respective laws and the international obligations of each of the Parties. Article 11 All payments relating to sea transport between the two countries shall be effected in accordance with the provisions of the payments agreement in force between the two countries. Article 12 No Indian income-tax shall be levied or collected by Indian authorities on freight-earnings of Czechoslovak vessels on the basis of reciprocity. Article 13 All differences between the Contracting Parties concerning the implementation of this agreement shall be settled by negotiation. Article 14 1. All matters concerning the operation of shipping services between both countries will be discussed between the authorised organisations of both countries, who for this purpose will conclude agreements for specified periods. 2. Such agreements shall particularly deal with matters such as frequency of services, nomination of loading and discharging ports, freight rates, and other details relating to shipping services. Article 15 The present agreement will come into force on the date of the exchange of notes confirming that it has been approved in accordance with the constitutional requirements of both Parties and will remain valid for a period of five years. After the expiry of this period the agreement will be automatically renewed always for one year unless notified to the country by one of the Parties by giving notice six months prior to the expiry of the period of validity. Done and signed in New Delhi on the 3rd day of November one thousand nine hundred and seventy-eight in two original copies in English both texts being equally authentic. ( Sd. ) Frantisak Mares (Sd.) S. Y. Ranade On behalf of the Government On behalf of of the Czechoslovak the Government of India . Socialist Republic . SIDE LETTER New Delhi, the 3rd November, 1978 Reference article 4 Excellency, While discussing various aspects of the bilateral shipping agreement between India and Czechoslovakia the question of sharing all cargo between the two countries on the basis of equality was also carefully considered. Article 4 of the said agreement broadly states the basis on which this sharing will be effected. The following guidelines will be followed to make the sharing arrangements more precise and specific. A. National General Cargo 1. Reference to reservation of national general cargo for third flag vessels in article 4/2 of the said agreement will imply that 20 per cent. of all national general cargo moving between the two countries will be reserved for the vessels of third flag countries especially those through whose ports national cargo moves. 2. The national flag vessels of the two Parties will have the right to carry the remaining 80 per cent. of the national general cargo on the basis of equality both in respect of lifting and freight earnings as far as practicable and subject to the service usual in this trade being rendered. B. National Bulk Cargo 1. In the carriage of all national bulk cargo the national flag vessels of the two countries will have the right to participate on the basis of equality subject to competitive freight rates and conditions. 2. The co-ordinating bodies in the case of bulk cargo on behalf of the Parties will be; Cechofracht, Praha, on Czechoslovak side and Transchart, New Delhi, and the Shipping Corporation of India, Bombay, on Indian side. C. Within six months of the conclusion of this Agreement the competent organisations specified under this agreement will conclude the necessary commercial arrangements for regulating the operational aspects. I shall feel grateful for the confirmation of the contents of this letter. Assuring you of my highest consideration. Yours sincerely, ( Sd. ) S. Y. Ranade, Secy. to the Government of India . Ministry of Shipping Transport. H. E. Mr. Frantisek Mares. First Deputy Minister of Foreign Trade, Government of the Czechoslovak Socialist Republic . SIDE LETTER New Delhi, the 3rd November, 1978 Reference article 4 Excellency, I acknowledge receipt of your letter of 3rd November, 1978, which reads as follows: " While discussing various aspects of the bilateral shipping agreement between India and Czechoslovakia the question of sharing all cargo between the two countries on the basis of equality was also carefully considered. Article 4 of the said Agreement broadly states the basis on which this sharing will be effected. The following guidelines will be followed to make the sharing arrangements more precise and specific. A. National General Cargo 1. Reference to reservation of national general cargo for third flag vessels in article 4/2 of the said Agreement will imply that 20 per cent. of all national general cargo moving between the two countries will be reserved for the vessels of third flag countries especially those through whose ports national cargo moves. 2. The national flag vessels of the two Parties will have the right to carry the remaining 80 per cent. of the national general cargo on the basis of equality both in respect of lifting and freight earnings as far as practicable and subject to the service usual in this trade being rendered. B. National Bulk Cargo 1. In the carriage of all national bulk cargo the national flag vessels of the two countries will have the right to participate on the basis of equality subject to competitive freight rates and conditions. 2. The co-ordinating bodies in the case of bulk cargo on behalf of the Parties will be: Cechofracht, Praha, on Czechoslovak side and Transchart, New Delhi, and the Shipping Corporation of India, Bombay, on Indian side. C. Within six months of the conclusion of this Agreement the competent organisations specified under this agreement will conclude the necessary commercial arrangements for regulating the operational aspects. I shall feel grateful for the confirmation of the contents of this letter. " I have the honour to confirm that the contents of your letter correctly set out the understanding reached between us. Assuring you of my highest consideration. Yours sincerely, ( Sd. ) Frantisek Mares, First Dy. Minister of Foreign Trade, Government of the Czechoslovak Socialist Republic . H. E. Mr. S. Y. Ranade, Secretary to the Government of India , Ministry of Shipping and Transport. File Number: 11(22)66-FLD