Indo-US Double Taxation Avoidance Agreement (DTAA) - Suspension of Collection during Mutual Agreement Procedure (MAP) - regarding.

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..... eference is invited to Article 27 of the Indo-US DTAA regarding Mutual Agreement Procedure. Para 4 of the Article 27 authorises the competent authorities to develop appropriate bilateral procedures, conditions, methods and techniques for implementation of MAP provided for in the Article. Reference is also invited to a number of references received regarding difficulty faced by a number of non-resi .....

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..... provisions of the Income-tax Act. A copy of the MOU is enclosed along with a model draft of bank guarantee to be furnished by the tax-payer. These are self-explanatory. On receipt of a formal request in terms of this MOU from a tax payer resident of USA, the Assessing Officers (A.O.) are required to keep the enforcement of collection of outstanding taxes in abeyance in respect of such tax p .....

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..... on to this effect shall be given to A.O., who shall, thereafter be entitled to invoke the guarantee in case the tax payer fails to pay the demand. In cases where a resolution of dispute is arrived at by the Competent Authorities after mutual consultation, tax payable shall be determined by the Assessing Officer in terms of such agreement as per procedure laid down in Instruction No. 1 dated 6.1 .....

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