France may lose its sheen as P-notes base for Indian mkts

France-based FPIs will lose their capital gains tax exemption in India after the CBDT proposed an amending protocol to the India-France DTAC. The move grants India full taxing rights on share sales, removes the MFN clause, and revises dividend tax rules. Surajkumar Shetty, Partner, JSA Advocates & Solicitors, said that some of the changes were possibly made due to the Supreme Court ruling in the case of Nestle. “The Supreme Court had held that a notification is a mandatory condition to give effect to a protocol changing the terms or conditions of the DTAC. Therefore, some of the beneficial provisions have now been built into the DTAC itself along with the deletion of the ‘most favoured nation’ clause,” Shetty said. Read more