New Delhi, Apr 3 (ANI): India and Myanmar have signed an agreement for a US 120 million dollar project here.
External Affairs Minister Pranab Mukherjee and his Myanmarese counterpart U. Nyan Win signed the pact, in the presence of Vice President Hamid Ansari and Maung Aye, Vice Chairman of Myanmar's ruling military junta, who is on a five-day visit to India.
The project envisions the construction of a multi-modal Kaladan transport corridor, which will allow port access to northeastern states, bypassing Bangladesh.
It includes the upgrading of the Sittwe port and the Kaladan waterway as well as the construction of a road from Setpyitpyin (Kaletwa) to the India-Myanmar border at a cost of 5.3 billion rupees.
India will spend 100 million dollars as well on projects overruns whereas Myanmar will contribute 10 million dollars and land for the project.
There have already been six rounds of talks since 2003 on the project, and both countries have initialled the draft framework agreement on the project, draft protocol on facilitation of transit transport, draft protocol on financial arrangements and draft protocol on joint maintenance and administration.
Myanmar plays a key role in India's energy security road map as it has several oil and gas fields. Last September, Petroleum Minister Murli Deora visited the country and signed a number of agreements.
India also looks towards Myanmar to control insurgents in the northeast who often slip across the border to set up camps when pursued by Indian security forces.
In addition, India and Myanmar on Thursday signed a Double Taxation Avoidance Agreement (DTAA) in New Delhi.
The agreement was signed between P.K. Misra, Chairman, Central Board of Direct Taxes, India and Kyi Thein, Ambassador Extraordinary and Plenipotentiary of the Union of Myanmar to India.
The agreement aims at avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income.
The signing of agreement coincides with the visit of Maung Aye, Vice Senior General and Vice Chairman, State Peace and Development Council of Myanmar to India.
The DTAA will cover income tax and surcharge in the case of India and the income tax and profit tax in the case of Myanmar. The agreement provides business profits taxable in the source state if the activities of an enterprise constitute a permanent establishment in the source state.
Examples of permanent establishment include a branch, factory, place of management, sales outlet. Profits of a construction, assembly or installation projects will be taxed in the state of source if the project continues in that state for 270 days or more.
Profits derived by an enterprise from the operation of ships or aircraft in international traffic shall be taxable in the country of residence of the enterprise. Dividends, interest and royalty income will be taxed both in the country of residence and in the country of source.
However, the maximum rate of tax to be charged in the country of source will not exceed five per cent in the case of dividends and 10 per cent in the case of interest and royalties. Capital gains from the sale of shares will be taxable in the country of source.
The agreement also incorporates provisions for exchange of information between tax authorities of the two countries and incorporates anti-abuse provisions to ensure that the benefits of the agreement are availed of by the genuine residents of the two countries.
DTAA with Myanmar is expected to provide tax stability to the residents of both the countries and facilitate mutual economic cooperation as well as stimulate the flow of investment, technology and services between India and Myanmar. (ANI)
