Nepal & India Essay Sample
India and Nepal on 27 November 2011 signed a revised Double Taxation Avoidance Agreement ( DTAA ) . This will assist forestall revenue enhancement equivocation and facilitate exchange of information on banking between the two states. DTAA. will let Indian bargainers and investors to bask revenue enhancement relaxation in India one time they pay revenue enhancements in Nepal. The understanding is besides likely to increase assurance of investors and assist Nepal pull more investing from India.
The revised DTAA between India and Nepal will replace an earlier understanding signed between India and Nepal in 1987.
Important Information
• Indian houses are the biggest investors in Nepal. They account for approximately 47. 5 per cent of entire sanctioned FDIs ( Foreign Direct Investments ) . • India is the biggest beginning of foreign investings in Nepal and its largest trading spouse. However. Nepal histories for merely 0. 44 per cent of India’s entire trade. • The bilateral trade between India and Nepal increased from USD 1. 98 billion US dollars in 2009-10 to around 2. 70 billion US dollars in 2010-11. which is an addition of 37 per cent.
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Revised DTAA between India and Nepal
KATHMANDU. NOV 27 – Nepal and India on Sunday signed the Double Taxation Avoidance Agreement ( DTAA ) .
The understanding. which replaces the old understanding signed between the two states in 1987. is aimed at easing exchange of information on banking between the two states and to assist forestall revenue enhancement equivocation.
Finance Minister Barsha Man Pun and his Indian opposite number Pranab Mukharjee signed the understanding in the presence of Prime Minister Baburam Bhattarai at the PM’s functionary abode in Baluwatar.
“The revised DTAA will supply revenue enhancement stableness to the occupants of India and Nepal and ease common economic cooperation every bit good as stimulate the flow of investing. engineering and services between India and Nepal. ” said the Mukherjee in his comments after subscribing the treaty.
DTAA. which is in line with best trade rules. will enable Indian investors and bargainers to bask revenue enhancement relaxation in India one time they pay revenue enhancements in Nepal.
He added the revised DTAA will supply revenue enhancement stableness to the occupants of India and Nepal and ease common economic cooperation every bit good as stimulate the flow of investing. engineering and services between India and Nepal.
“In the country of exchange of information. the revised DTAA provides for internationally recognized criterions including sharing of bank information and sharing of information without domestic revenue enhancement involvement. ” said Mukherjee.
Indian Foreign Secretary Ranjan Mathai had arrived in Kathmandu on Saturday to do readyings for Mukherjee’s visit to subscribe the DTAA.
During his stay in Kathmandu. Mukherjee met President Dr. Ram Baran Yadav. Prime Minister Baburam Bhattarai. and Pun.
Beginnings near to Mukherjee said met top leaders. including UCPN ( Maoist ) Chairman Pushpa Kamal Dahal. Nepali Congress President Sushil Koirala and CPN-UML Chairman Jhala Nath Khanal.
Nepal and India were supposed to subscribe the DTAA during Bhattarai’s visit to New Delhi. but the program was postponed mentioning demand for more readyings.
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Political state of affairs in Nepal non to impact DTAA: Autopsy
India on Friday said the unstable political state of affairs in Nepal will non hold any radioactive dust on their late signed Double Taxation Avoidance. Agreement ( DTAA ) . a treaty that is another cardinal measure to hike their economic ties. The political state of affairs came up for treatments during a meeting with Prime Minister Manmohan Singh and his Nepali opposite number Baburam Bhattarai on the out of boundss of the Rio+20 acme in Rio de Janeiro. “The dual revenue enhancement treaty is in topographic point and so is the instance with other bilateral treaties signed so far. ” Foreign Secretary Ranjan Mathai told newsmans after the meeting. Bhattarai has called new elections for November after the term of the Constituent Assembly expired without political leaders finishing the undertaking of composing a new Constitution. The Constituent Assembly was elected to a biennial term in 2008 to outline a new Fundamental law but has been unable to complete the undertaking. Its term of office has been extended four times. but the Supreme Court rejected any farther extensions.
The revised revenue enhancement pact was signed during Finance Minister Pranab Mukherjee’s visit to Nepal last twelvemonth. It will replace the 1987 pact.
The understanding. among other things. will ease exchange of information on banking between the two states and will relieve Indian investors and bargainers from paying revenue enhancement in India one time they pay revenue enhancements in Nepal.
India is the largest beginning of foreign investings in Nepal and the bilateral trade between the two states is estimated to be USD 2. 7 billion in 2010-11.
During his negotiations with Bhattarai. Prime Minister Singh said he was confident that all parties in Nepal would sit together and happen a manner out to cover with the political state of affairs.
Prime Minister Singh besides had a meeting with Sri Lankan President Mahinda Rajapakse.
Beginning: hypertext transfer protocol: //www. indianexpress. com/news/political-situation-in-nepal-not-to-affect-dtaa-pm/965365/0
INDIA’S DOUBLE TAX AVOIDANCE AGREEMENT WITH NEPAL- Tax Ratess
Effective day of the month in India01. 04. 89. A. Y. 1990-91
Dividend ( other than u/s. 115O ) ( % ) 10 @ . 15 @ *
Interest ( % ) 10 @ . 15 @ **
Tax rate on Royalties ( % ) 15 @
Technical Service Fees ( % ) In state of abode as per domestic jurisprudence Remarks*10 % revenue enhancement on dividends if at least 10 % of the capital is owned by Company ; in other instances 15 %
**Interest nonexempt @ 10 % if receiver is bank transporting on bonafide banking concern. otherwise 15 % .
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Nepal agrees to ink treaty to protect Indian investings:
In a important discovery. Nepal has agreed to a Bilateral Investment Protection and Promotion Agreement ( BIPPA ) . which includes a proviso to counterbalance Indian commercial entities. which have been progressively targeted in the past twosome of old ages. on par with local houses in instance of an rebellion or public violence.
While last minute clearances are being processed from the Finance Ministry. the chief barrier to the understanding was crossed after it was approved by the Nepal Cabinet on Wednesday. It is learnt that Nepal Prime Minister Baburam
Bhattarai pushed for clearance to the treaty along with the Double Taxation Avoidance understanding despite resistance. In fact. on Tuesday. hardliners within his ain party had demanded that no of import understanding or pact should be signed with India.
But on Thursday. Bhattarai was cheerful. “We are optimistic that it ( BIPPA ) will be signed… we want to make an ambiance in Nepal where Indian investings will be attracted. We are come ining into understandings that will advance trade and investing. ” he said.
This understanding has been hanging fire for over a twelvemonth due to political resistance to the compensation clause. India had argued that the same proviso existed in a similar investing understanding between Nepal and UK.
Besides the BIPA and the dual revenue enhancement turning away understandings. the focal point of Bhattarai’s visit will be on economic issues and advancing bilateral trade and investing. Nepal is acute to pull Indian investings and besides wants to rectify its monolithic trade shortage.
“Nepal can non stay an island of poorness between India and China. We need more economic interaction. We can non thrive without close interaction with India. Our economic fate is interlinked. ” Bhattarai said. adding that Nepal wants to make an ambiance that would pull Indian investings.
Nepal is besides acute to force through the building of transmittal lines that will enable sharing of electricity between the two states. Kathmandu hopes to export power to India in the hereafter. tapping its immense hydro electricity potency. “We are power deficient now but in future we can export power to India. We need to develop cross boundary line transmittal lines. ” he said.
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Trade relation between Nepal and India:
Nepal and India have a history of antique dealingss in trade and commercialism. India is Nepal’s largest trade spouse and beginning of foreign investing. Entire bilateral trade has reached US $ 3. 21 billion ( NRS 257. 10 billion ) during Nepali financial twelvemonth 2009-10. During that twelvemonth. Nepal’s imports from India amounted US $ 2. 71 billion ( NPR 217. 11 billion ) . and exports to India remained about US $ 0. 50 billion ( NPR 39. 99 billion ) .
Exports
Readymade garments are Nepal’s topmost export points to abroad states. followed by woolen rugs and pashmina merchandises. Other traditional export points to abroad states are fells and tegument. lentils. metal and wooden handcrafts. agro- and forest-based primary and secondary goods. leather. natural jute. big cardamon. ginger. tea and medicative herbs. Coffee. honey. Terry towels. micro transformers. covers and buttons are emerging as new export points.
Visualizing the range of engineering sweetening and production potencies. the approaching export points are mushroom. Crocus sativus and flower gardening merchandises. Vegetable seeds. orthodox and CTC tea. Niger seeds. indispensable oils from medicative and aromatic workss. leather goods. woolen goods. Ag jewelry and silverware. gold jewelry. etc besides offer good export
chances beside the bing exportable points.
Imports
Over the old ages. Nepali imports have increased well and undergone major structural alterations. The major import points include crude oil merchandises. machinery and trim parts. conveyance equipment. pharmaceuticals. fabrics. chemicals. electrical goods. vehicles and trim parts. medical specialties and medicative equipment. natural wool. betel nuts. aircraft and spares parts. natural silk. togss. fertilisers. telecommunication equipment. etc.
Bilateral Mechanism
The bilateral mechanism for trade and theodolite is provided by the India-Nepal Treaties of Trade. of Transit. and Agreement for Co-operation to Control Unauthorized Trade. 1991. The Trade Treaty valid for seven old ages was signed on November 27. 2009. and will be automatically renewed for another seven old ages. Under the Treaty of Trade. India provides. on a non-reciprocal footing. responsibility free entree into the Indian market for all Nepalese-manufactured articles excluding a short negative list ( coffin nails. intoxicant and cosmetics ) . capable to the conditions. since March 2002. that the exports meet the domestic value add-on demand of 30 % and alteration in HS categorization at the four-digit degree in the class of industry or processing in Nepal. After the March 2002 alteration. one-year quotas have been prescribed for duty-free exports to India for four sensitive points – vegetable fats ( 100. 000 metric tons ) acrylic narration ( 10. 000 metric tons ) . Cu merchandises ( 10. 000 metric tons ) and zinc oxide ( 2. 500 metric tons ) .
Bilateral trade takes topographic point by and large in Indian rupees. but Nepal’s cardinal bank maintains a list of points that can be imported from India in dollars. Presently. there are about 100 points on the list. Indian rupee is exchangeable in all Bankss and fiscal establishments in Nepal. The exchange rate has been maintained at NRs. 1. 6 per Indian rupee. The new proviso of trade pact allows the installations to the importers irrespective of the currency ( US $ or IC ) used for purchasing the goods from India.
The India-Nepal Treaty of Transit. renewed every seven old ages. provides for port installations to Nepal at Kolkata and specifies 15 theodolite paths between Kolkata and the India-Nepal boundary line. As requested by the Nepali side. a separate Customs Cell at Haldia has become operational from 16 August 2004. For bilateral trade. 22 entry/exit points are provided along the Indo- Nepal boundary line. The Transit Treaty was last renewed in March 2006. The Agreement for Cooperation between India and Nepal to Control Unauthorised Trade was automatically renewed for five old ages in March 2007.
The rail service Agreement between the two authoritiess was concluded in 2004 which governs the carrying of majority lading by train from Kolkata to Birgunj. and frailty versa. Recently. the Government of India has agreed to supply extra theodolite point at Vishakapattanam which is traveling to be operational really shortly.
Beginning: hypertext transfer protocol: //www. nepalembassy. in/tradeandcomm. htm
Indo-Nepal Trade: A Quantitative Analysis
An effort has been made to through empirical observation analyse the Indo-Nepal trade place. utilizing market portion analysis. dependence ratio. trade strength. complimentarity and state prejudice indices. grade of horizontal trade. comparative advantage. similarity index and intra-industry trade. India is fring Nepal as the mark market whereas Nepal has hardly maintained its portion in India. Owing to the being of hapless complementarity. Nepal’s export composing could non fit to that of import composing of India. Among the trade goods that Nepal has comparative advantage. India has tended to stay the possible market merely for a few trade goods. Despite a displacement in export composing. there is no possibility of horizontal trade between Nepal and India. The bing intra-industry trade linkages between these two states are besides really hapless. In add-on. the partial complementarity in export-import constructions and the competitory export construction suggests that the comfortable enlargement of trade between these states can be achieved through perpendicular trade. harmonisation of production constructions. and alteration in trade and industrial policies.
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Tendencies in trade and investing:
Bilateral trade was US $ 4. 21 billion during Nepali financial twelvemonth 2010-11 ( July 16 – July 15 ) . Nepal’s import from India amounted to US $ 3. 62 billion and exports to India aggregated US $ 599. 7 million. In the first six months of financial twelvemonth 2011-12. Nepal’s entire trade with India was about US $ 1. 93 billion ; Nepal’s exports to India were about US $ 284. 8 million ; and imports from India were about US $ 1. 64 billion.
Since 1996. Nepal’s exports to India hold grown more than eleven times and bilateral trade more than 10 times ; the bilateral trade that was 29. 8 % of entire external trade of Nepal in twelvemonth 1995-96 has increased to 66. 4 % in 2010-11. Since 1995-96. the entire external trade of Nepal has increased from NRs. 9433 crores ( IRs. 5895 crores ) to NRs. 45946. 1 crores ( IRs. 28716. 3 crores ) . 83 % of this addition is on history of addition in the bilateral trade between India and Nepal. which grew from NRs. 2808 crores ( IRs. 1755 crores ) in 1995-96 to NRs. 16319. 9 crores ( IRs. 10199. 9 crores ) in first six months of 2011-12. Nepal’s exports besides increased from NRs. 1988 crores ( IRs. 1242 crores ) in 1995-96 to NRs. 3591. 6 crores ( IRs. 2244. 7 crores ) in first six months of 2011-12. 45 % of this addition was on history of addition in Nepal’s exports to India.
Nepal’s chief imports from India are crude oil merchandises ( 28. 6 % ) . motor vehicles and trim parts ( 7. 8 % ) . M. S. note ( 7 % ) . medical specialties ( 3. 7 % ) . other machinery and spares ( 3. 4 % ) . coldrolled sheet in spiral ( 3. 1 % ) . electrical equipment ( 2. 7 % ) . hotrolled sheet in spiral ( 2 % ) . M. S. wires. roads. spirals and bars ( 1. 9 % ) . cement ( 1. 5 % ) . agribusiness equipment and parts ( 1. 2 % ) . chemical fertiliser ( 1. 1 % ) . chemicals ( 1. 1 % ) and thread ( 1 % ) . Nepal’s export basket to India chiefly comprises jute goods ( 9. 2 % ) . zinc sheet ( 8. 9 % ) . fabrics ( 8. 6 % ) . togss ( 7. 7 % ) . polyster narration ( 6 % ) . juice ( 5. 4 % ) . catechue ( 4. 4 % ) . Cardamom ( 4. 4 % ) . wire ( 3. 7 % ) . tooth paste ( 2. 2 % ) and M. S. Pipe ( 2. 1 % ) .
Indian houses are the biggest investors in Nepal. accounting for 47. 5 % of entire FDI proposals approved foreign direct investing of IRs 42. 53 billion ( approx. US $ 448 million ) and 23. 7 % of entire 2108 FDI proposals approved ventures with foreign investing.
Indian ventures in Nepal are engaged in fabrication. services ( banking. insurance. dry port. instruction and telecom ) . power sector and touristry industries. Some big Indian investors include. ITC. Dabur India. Hindustan Unilever. VSNL. TCIL. MTNL. State Bank of India. Punjab National Bank. Life Insurance Corporation of India. Asiatic Paints. CONCOR. GMR India. IL & A ; FS. Manipal Group. MIT Group Holdings. Nupur International. Transworld Group. Patel Engineering. Bhilwara Energy. Bhushan Group. Feedback Ventures. R J Corp. KSK Energy. Berger Paints. Essel Infra Projects Limited and Tata Projects. etc. In recent old ages. Hydropwer sector has emerged as an attractive sector for Indian investings. Government of Nepal has issued 28 study licences for hydropower undertakings in Nepal holding coevals capacity of 8249 MW to Indian companies/ joint ventures.
These include Satluj Jal Vidyut Nigam Limited ( 900 MW Arun III ) ; GMR ( 900MW Upper Karnali and 600 MW Upper Marsyangdi ) ; Everest Power ( 184 MW Upper Karnali St-1 ) ; Bhilwara Energy Limited ( 120 MW Likhu-4. 50 MW Balephi. 194 MW Mugu Karnali-1 & A ; 274 MW Humla Karnali-1 ) ; Patel Engineering Ltd ( 130 MW Budhi Gandaki ka & A ; 260 MW Budhi Gandaki kha ) ; PES Energy Pvt. Ltd. ( 210 MW Phulkot Karnali & A ; 216 MW Upper Trishuli-1 ) ; LANCO Infratech Limited ( 303 MW Namlan Project. 200 MW Karnali-7 & A ; 100 MW Kaligandaki Gorge ) ; Jindal Power Limited ( 454 MW Chainpur – Seti Project ) ; KSK Energy Pvt. Ltd. ( 400 MW Tila-1. 420 MW Tila-2. 212 MW Bheri-1. 180 MW Bheri-2. 174 MW Bheri-3. 130 MW Manang Marsyangdi & A ; 150 MW Upper Marsyangdi ) ; Avanti Feeds Ltd. ( 80 MW Seti Nadi-3 ) . Maytas Estates Pvt. Ltd. ( 138 MW Dudhkoshi-2 ) ; Nanda Devi Agro Farms P. Ltd. ( 350 MW Dudhkoshi-4 ) ; Essel Infraprojects Limited ( 40 MW Lower Solu ) ; and Tata Power ( 880 MW Tamakoshi – 3 ) . Several other companies are expecting determination on their study licence applications or are negociating with the local licence holders.
Nepal’s theodolite trade is routed through 20 two designated paths from India-Nepal boundary line to the port of Kolkatta/Haldia. In add-on. Nepal’s trade with and through Bangladesh besides transits through India.
Government of India is supplying aid for development of cross-border trade related substructure. It includes upgradation of four major usage checkpoints at Birgunj-Raxaul. Biratnagar-Jogbani. Bhairahawa-Sunauli and Nepalgunj-Rupediya to international criterions ; upgrading attack main roads to the boundary line on the Indian side ; upgrading and spread outing the route web in the Terai part of Nepal ; and. wide gauging and widening rail links to Nepal.
Bilateral Framework
The bilateral model for trade is provided by the India-Nepal Treaty of Trade and Agreement of Co-operation to Control Unauthorised Trade 2009. A new Trade Treaty. valid for seven old ages was signed on October 27. 2009 after successful decision of bilateral audiences. which began in August 2006.
The chief characteristics of the old Trade Treaty retained in the 2009 Treaty are as follows: Duty free entree to each other’s primary merchandises as per in agreement list. which has been expanded in 2009 Treaty. Nepali manufactured merchandises are allowed non-reciprocal entree to the Indian market. free of basic imposts responsibility. on the footing of Certificate of Origin issued by a GoN designated authorization – FNCCI. if the goods are manufactured in Nepal with Nepalese and/or Indian inputs ; or. with at least 30 % local value add-on. if 3rd state inputs are used ; and. involves significant fabrication procedure taking to alter in HS categorization at four-digit degree ; Annual quotas for responsibility free entree in regard of four points – vegetable fats ( 100. 000 metric tons ) acrylic narration ( 10. 000 metric tons ) . Cu merchandises ( 10. 000 metric tons ) and zinc oxide ( 2. 500 metric tons ) ; MFN list of three points – coffin nails. intoxicant ( excepting beer ) and cosmetics with non-Nepalese and non-Indian trade names ; Nepalese goods pull Offseting Duty ( CVD ) equal to strike responsibility on similar merchandises in India ; Goods manufactured by little scale units in Nepal enjoy the same benefits as SSIs in India with respect to revenue enhancement freedom ;
The exports and imports of goods non capable to prohibitions or responsibilities are besides allowed to travel through the traditional paths on common boundary line. ( Nepal has established imposts Stationss called Chhoti Bhansars on some of these traditional routes. ) The chief alterations introduced in the 2009 Trade Treaty are as under: The cogency of the Treaty has been increased from five to seven old ages. along with the proviso of automatic extension for farther periods of seven old ages at a clip. This will supply more stable model for bilateral trade and promote investings in Nepal based on discriminatory entree provided by the Treaty to Nepali merchandises. No favoritism will be made in regard of revenue enhancement. including cardinal excise. discount and other benefits to exports simply on the footing of payment mode and currency of payment of trade. This will convey the bilateral trade conducted in Indian Rupees at par with trade in exchangeable currency and has ended the bing mechanism of responsibility refund process which was procedurally cumbrous. It has provide Nepal a direct control on the imposts responsibility grosss on import of manufactured goods from India.
It besides allows Indian exports to avail benefit of export publicity strategies predominating in India. doing these merchandises more competitory in Nepal either for sale or for farther value add-on. [ This alteration has came into consequence from 1st March 2012 ] The clip bound for impermanent import of machinery and equipment for fix and care has been raised from 3 to 10 old ages. •Several new points of export involvement to Nepal have been added to the list of primary merchandises giving these points duty free entree to India without any quantitative limitations. These include flower gardening merchandises. atta. bran. chaff. bristles. herbs. rock sums. bowlders. sand and crushed rock. Standard for ciphering value add-on for deriving discriminatory entree to India has been changed from ex-factory footing to FOB footing. India has agreed to see release. on petition from GON. of any extra responsibility that may be levied over and above CVD. Both sides have agreed to relieve exports of goods. which are already covered under forward contract. from infliction of limitations on exports.
Both sides will allow acknowledgment to the healthful and phyto-sanitary certifications issued by the competent authorization of the exporting state based on appraisal of their capablenesss. Articles manufactured in Nepal. which do non carry through the standards for discriminatory entree will be provided MFN entree to the Indian market. The certification of beginning in instance of such exports has been prescribed. The commissariats sing precaution steps in instance of serious hurt to the domestic industry have been streamlined. A joint mechanism. consisting local governments has been established to decide jobs originating in clearance of perishable goods. An Inter-Governmental Sub-Committee ( IGSC ) at the joint secretary-level has been established. Existing Inter-Governmental Committee ( IGC ) at the Secretary degree will run into one time in six months and the IGSC will run into at the interval of the two IGC meetings.
Four extra Land Customs Stations ( LCSs ) will be established to ease bilateral trade: Maheshpur/Thutibari ( Nawalparasi ) ; Sikta-Bhiswabazar ; Laukha-Thadi ; and Guleria/Murtia. conveying the entire figure of Stations to 26. For the first clip. bilateral trade will be allowed by air through international airdromes connected by direct flights between Nepal and India ( Kathmandu/Delhi. Mumbai. Kolkata and Chennai ) . The Indian side has agreed to reexamine and simplify the bing administrative agreements for operationalisation of fixed quota for acrylic narration. Cu merchandises and Zn oxide. India has agreed to see several extra merchandises as entirely produced or manufactured in Nepal for the intent of deriving discriminatory entree to the Indian market. It includes articles collected in Nepal fit merely for recovery of natural stuffs and waste and bit ensuing from fabricating operations in Nepal.
It besides includes merchandises taken from seabed/ ocean floor/ sub-soil for which Nepal has sole rights under UNCLOS. India has agreed to help Nepal to increase its capacity to merchandise through betterment in proficient criterions. quarantine and proving installations and related human resource capacities. Bilateral trade takes topographic point either in Indian rupees or exchangeable currency. Nepal’s cardinal bank ( Nepal Rashtra Bank ) maintains a list of points that can be imported from India in exchangeable currency. Currently. 135 points are in the list. Since 1993. the Nepal Rastra Bank maintains a fixed exchange rate with Indian Rupee ( 1 INR = 1. 6 NPR ) . India and Nepal have a pact of theodolite. which confers transit rights through each other’s district through reciprocally agreed paths and modes. The pact was last renewed for seven old ages in March 2006. The cardinal characteristics are:
India offers 22 theodolite paths from Kolkata/Haldia to Nepal for its 3rd state trade. Goods can travel by route or rail. The creative activity of ICD in Birgunj and extension of railroad line from Raxaul to Birgunj has facilitated direct motion of goods in theodolite by rail to Nepal. A simple imposts process has been put in topographic point for Nepal’s 3rd state traffic. Since 1993. India besides allows motion of goods from one portion of Nepal to another through a simple procedure of imposts set abouting. Nepal has agreed to widen similar installation to India in the class of reclamation of the theodolite pact in March 2006. India has extended Nepal direct theodolite routes to Bangladesh for bilateral and 3rd state traffic. One route path and one rail path have been notified. The route path is through Kakarbitta-Panitanki-Phulbari-Banglabandha corridor. The rail path is through Radhikapur-Birol interchange point on India – Bangladesh boundary line. The Agreement of Cooperation between India and Nepal to Control Unauthorised Trade was signed on 27 October. 2009.
A revised Agreement of Cooperation to Control Unauthorised Trade between India and Nepal was signed on 27 October 2009. The new Agreement removes limitation imposed in the old Agreements on export of goods imported by one party from the other to the 3rd states. without affecting any fabrication activity.
Bilateral Investment Protection and Promotion Agreement ( BIPPA ) was signed on 21st October 2011 during the visit of Hon’ble Baburam Bhattarai. Prime Minister of Nepal to India.
India and Nepal signed a Double Tax Avoidance Agreement ( DTAA ) on 27th November 2011 in Kathmandu during the visit of Finance Minister Shri Pranab Mukherjee of India to Kathmandu.
India and Nepal signed a Rail Services Agreement ( RSA ) in May 2004. to widen lading train service to the Inland Container Depot ( ICD ) at Birgunj in Nepal. A Container Corporation of India-led joint venture is runing the ICD. The RSA was modified in December 2008 to let oil/ liquid traffic in armored combat vehicle waggons and bilateral break-bulk lading in level waggons. Bilateral Rail Services Agreement ( RSA ) meeting between India and Nepal was held on 1-2 March. 2012 in Kathmandu.
A Motor Vehicles Agreement ( MVA ) for rider vehicles. initialled in February 2004 is expecting formal signature. The understanding envisages coach services between India and Nepal and will ease persons going to either state in their personal vehicles.
A revised bilateral Air Services Agreement was signed on 16 February. 2010.
An Inter-Governmental Committee on Trade. headed by Commerce Secretaries meets on a regular basis to see policy. regulative and substructure issues in India-Nepal trade.
Line of recognition from Exim Bank of India to Government of Nepal GOI agreed to supply a USD 100 million Line of Credit ( LoC ) to Nepal in June 2006 for executing of substructure development undertakings as prioritized by GON. As a particular gesture. GOI agreed to thin the norms of Indian content and eligibility standard for accessing the LoC. Exim Bank of India and GON signed an understanding in September 2007. following which. LoC was operationalised in January 2008. The undertakings identified for execution under the LoC include 11 route development undertakings. rehabilitation of 15 MW Devighat Hydro Power Project ( HEP ) . development of 27 MW Rahughat HEP. Nepal part of the Muzaffarpur- Dhalkebar cross-border transmittal line and rural electrification undertakings. Thirteen contracts of value USD 73. 98 million have been approved so far under the LoC. An sum of USD 25. 757. 833. 75 was disbursed till mid-November. 2010.
In response to farther petition from Government of Nepal. the Government of India has agreed to widen another line of recognition of US $ 250 million from EXIM Bank of India to GoN at similar footings and conditions as the bing LoC. The cotract understanding between Government of Nepal and Exim Bank was signed on 21st October 2011 in New Delhi during the visit Hon’ble Prime Minister of Nepal Dr. Baburam Bhattarai.
Beginning: hypertext transfer protocol: //www. indianembassy. org. np/trade-and-commerce. php
Nepal’s trade shortage
Harmonizing to Nepal Rastra Bank ( NRB ) . the country’s trade shortage increased by 17. 6 per centum to Rs 212. 36 billion in the first seven months of the current financial twelvemonth. NRB’s economic study shows that exports increased by 13. 4 per centum to Rs 42. 59 billion while imports went up by 16. 9 per centum to Rs 254. 95 billion. Imports from India increased by 11. 6 per centum while imports from 3rd states increased by 28. 1 per centum.
Most of Nepal exports to India were zinc sheets. fabrics. polyester yam. GI pipe and Cu wire rod while it exported Nepali woollen rugs. readymade garments. pashmina and paper merchandises to other states. Although trade shortage has increased. the overall balance of payment ( BoP ) recorded its highest excess of Rs 75. 09 billion during the same period. NRB attributes the BoP excess to greater influx of remittal and touristry income.
Remittance influx increased by 35. 5 per centum to Rs 188. 19 billion. an addition of 11. 7 per centum from the same period last twelvemonth. Tourism income besides increased by 28 per centum in the first seven months of the current financial twelvemonth. NRB has besides reported the consumer monetary values increased by 7 per centum in mid-February 2012 and nutrient costs besides increased due to boost in conveyance menus. Monetary values of milk merchandises and eggs went up by 17. 6 per centum and fruit monetary values increased by 14. 1 per centum. Transport menus increased by 18. 5 per centum this twelvemonth.
Beginning: hypertext transfer protocol: //www. parakhi. com/news/2012/03/26/nepals-trade-deficit-up-17-6-percent
Cases:
A. Income-Tax Officer V Branch Manager. Central Bank Of … on 7 November. 2001 Equivalent commendations: 2002 256 ITR 26 Pat
Bench: R Yadav. K Gupta
Order
K. K. Gupta. Accountant Member
1. The Department is in entreaty against the order of the erudite Commissioner of Income-tax ( Appeals ) who held that unexplained sedimentations in the name of Nepali citizens in the Indian Bankss can non be taxed under Section 69 of the Income-tax Act. 1961. The chief ground asserted by the Department is that it is non proved that the beginning of such sedimentation in the bank is really in Nepal and non in India.
2. The erudite Departmental Representative submitted that on the footing of the question conducted at the bank information was gathered under Section 133 ( 6 ) of the Income-tax Act for misdemeanor of Section 195 of the Income-tax Act associating to a Nepali/non-resident. Notice under Section 142 ( 1 ) was issued but no return was filed.
3. Alternatively a transcript of the leger history of the depositor’s history in the bank was filed. The erudite Assessing Officer considered the sedimentation as income by the non-resident in India and. hence. taxed it as unexplained investing under Section 69 together with involvement earned during the twelvemonth thereon relevant to the assessment twelvemonth 1993-94.
4. The erudite departmental representative submitted that the erudite Commissioner of Income-tax ( Appeals ) erred in sing the fact that the taxability of deemed income under Section 69 does non come into trend on the footing of the dual revenue enhancement turning away understanding with Nepal.
5. Learned advocate for the assessee submitted that the erudite Commissioner of Income-tax ( Appeals ) had considered the facts and fortunes under the commissariats of the jurisprudence inasmuch as he has relied on Articles 6 to 21 which form portion of Chapter III under the head “Taxation of income” . This provides for non taxing in India the deemed income of occupants of Nepal. Therefore. it was non a instance that of covering with charging of income alternatively it was covering with a state of affairs in which the same income becomes nonexempt in both the states.
6. We have considered the rival entries and we have perused the orders of the lower governments. We have observed that the erudite Commissioner of Income-tax ( Appeals ) had justly held that the commissariats of Article 22. on which the erudite Assessing Officer relied to revenue enhancement the sum of unexplained investing under Section 69 of the Income-tax Act does non use inasmuch as the pertinence of Article 22 arises at a ulterior phase after the taxability of a peculiar income which has been decided as per the commissariats of Articles 6 to 21 of the dual revenue enhancement turning away understanding with Nepal. There is no other determination of fact that the money really belongs to the occupants of India and there is no given that it does non belong to the Nepali occupants in whose names the sedimentations stand. Furthermore. there was no misdemeanor of Nepali jurisprudence which. if it may be in the fittingness of things. be brought to the notice of the Nepal Rashtriya Bank straight or through the Nepali Embassy or Consulate. In position of these facts and fortunes. we have no vacillation in holding with the order of the erudite Commissioner of Income-tax ( Appeals ) and disregard the entreaty filed by the section.
