APPENDICES

APPENDIX 1 PART'A'

Ust of industries/ items eligible for automatic approval for foreign equity up to 50% by RBI

A-1 Mining oflron Ore Mining of iron ore A-2 Mining of Metal Ores other than Iron Ore Mining of Uranium Group ores is not covei"Cd. 1. Mining of Manganese ore 11. Chromite iii. Bauxite iv. Copper ore v. Mining oflead and zinc ores

A-3 Mining ofNon-metallic Minerals Not Elsewhere Classified i. Mining and quarrying of rock aw-egates, sand and clays ii. Miningfquanying of minerals for construction other- than rock aggregates sand and clays iii. Mining of fertilizer and chemical minerals iv. Mining of ceramic, refraaory and glass minerals v. Sah mining and quarrying including crushing. saeening and evaporating in pans vi. Mining of mica vii. Mining of other- non-metallic minerals

PART-B List of Industrial/Item~ Eli:fble for Automatic Approval for Foreign Equity upto 51% by RBI

B-1 Metallurgicalindustries 1. Ferro alloys 11. castings and forging iii. Non-ferrous metals and their alloys including aluminium foils iv. Sponge iron and palletisation v. Iron and steel pipes and tubes and fittings thereof vi. Pigiron B-2 BOILERS AND STEAM GENERATING PLANTS B-3 PRIME MOVERS OTHER THAN ELECI'RICAL GENERATORS. i. Industrial turbines ii. Internal Combustion engines iii. Alternate energy systems like solar, wind, etc. and equipment thereof iv. Gas/hydro/steam turbines B4 ELECfRICAL EQUIPMENT i Equipment for transmission and distribution of electricity including power and distribution transformers, power relays, HT-

switch gear, synchronous condensers ii. Electrical motors 111. Electrical furnaces, industrial furnaces and inwction heating equipment iv. X-ray equipment v. Electronic equipment, components including subscribers and telecommunication equipments vi. Component wires for manufacture oflead-in-wires vii. Hydro/steam/gas generators/generating sets viii. Generating sets and pumping sets ix. Jelly-filled telecommunication cables x. Optic fibre xi. Energy efficient lamps xii. Midget carbon electrodes B-5 TRANSPORTATION i. Mechanised sailing vessels upto 10,000 DWf including fiShing trawlers ii. Ship ancillaries iii. a. Commercial vehicles, public transport vehicles including automotive commercial three wheelers, jeep type vehicles,

industrial locomotives b. Personal transport vehicles, automotive two-wheelers and three wheelers c. Automotive components/spares and ancillaries iv. Railway equipments B-6 INDUSTRIAL MACHINERY B-7 MACHINE TOOLS 1. Machine and industrial tools and their controls and accessories ii. Jigs, fixtures, tools and dies of specialised types and cross land tooling iii. Engineering production aids such as cutting and forming tools, patterns and dies and mining tools B-8 AGRICULTURAL MACHINERY 1. Tractors ii. Self propelled harvester- combines iii. Rice transplanters B-9 EARTH MOVING MACHINERY B-10 INDUSTRIAL INSTRUMENTS Indicating, recording and regulating devices for pressure, temperature, rate of flow weights levels and the like

~()()

B-11 SCIENTIFIC AND ELECTROMEDICAL INSTRUMENTS A!"\D LABORATORY EQUIPMENTS B-12 NITROGENOUS AND PHOSPHATIC FERTILIZERS FALLING UNDER -INORGANIC FERTILIZERS

UNDER '18 FERTILIZERS' IN THE FIRST SCHEDULE TO the Industries Development and Regulations. Act, 1951

B-13 CHEMICALS OTHER THAN FERTILIZERS. i. Organic chemicals ii. Inorganic chemicals iii. Synthetic resins and plastics IV. Man made fibres · v. Synthetic rubber

. vi. Industrial explosives vii. Teclmical grade insecticides, fungicides, weedicides, and the like viii. Synthetic detergents ix. Miscellaneous chemicals for inWslrial use only. B-14 DRUGSANDPHARMACEUTICAL Except those produced by the use of re-combinant DNA technology. B-15 PAPER AND PULP 1. Paper and pulp including paper prolklcts ii. Industrial laminates B-16 i. Automobile tyres and tubes ii. Rubberised heavy duty industrial belting of all types iii. Rubberised conveyor behing iv. Rubber' reinforced and lined tire fighting hose pipes v. High pressure lxaided hoses vi. Engineering and industrial plastic prolklcts B-17 PLATEGLASS 1. Glass shell • for television tubes ii. Float glass and plate glass iii. H. T. insulators IV. Glass fibres of all types B-18 CERAMICS Ceramics for industrial uses B-19 CEMENTPRODUCTS i. ii. B-20 B-21 i. ii. B-22 B-24 i. ii. iii. iv. B-25 B-26 B-27 L ii. iii. iv. B-28 B-29 B-30 i. ii. iii. iv. V.

B-31 a. b. B-32

B-33

B-34 B-35 B-36 I.

II.

iii. iv. v. vi. vii.

Portland cement Gypsum boards, wall boards and the like HIGH TECHNOLOGY REPRODUCTION AND MULTIPLICATION EQUIPMENT CARBONANDCARBONPRODUCTS Graphite electrodes and anodes Impervious graphite blocb and sheets PROTEINSIONED IDGH PRESSURE RCC PIPES PRlNTING MACHINERY Web-fed high speed off-set rotary printing machine having output of30,000 oc more impressions per hour Photo composing/type setting machines Multi-colour sheet-fed off-set printing. machines of sizes of 18"K25" and above High speed rotogravure printing machines having output of30,000 or more impressions per hour WELDING ELECTRODES OTHER THAN THOSE FOR WELDING MILD STEEL INDUSTRIAL SYNTHETIC DIAMONDS Photosynthesis improvers Genetically modified free living symbiotic nitrogen fixer Pheromone Bio-insecticides EXTRACTION AND UPGRADING OF MINOR OILS PRE-FABRICATED BUILDING MATERIAL SOYA PRODUCTS Soya texture p!'o!cins Soya p!'Oteins isolates Soya p!'Otein concentrates Other specialised pr<>Wcts of soyabean · Winterised and deodorised refmed soyabean oil Certified high yielding hytrid seeds and synthetic seeds

certified high yielding plantlets developed through plant tissue culture ALL FOOD PROCESSING INDUSfRIES OTHER THAN MILK FOOD, MALTED FOOD AND FLOUR, BUT EXCLUDING THE ITEMS RESERVED FOR SMALL SCALE SECTOR ALL ITEMS OF PACKAGING FOR FOOD PROCESSING INDUSTRIES EXCLUDING THE ITEMS RESERVED FOR SMALL SCALE SECTOR HOTELS AND TOURISM-RELATED INDUSTRY SOFrWAREINDUSTRY MANUFACTURE OF FOOD PRODUCTS Preservation of meats except by canning

Processing and canning of meat Manufacture of milk powder, ice-cream, powder and condensed milk except baby milk foods Manufacture of baby milk foods Manufacture ofbuttcr, cream, ghce, cheese and khoya etc Manufacture of pasteurised milk whether or not in bottles/polythene packs etc. plain or flavoured. Manufacture of other dairy products n.e.c

301

viii. Sun-drying of t!uits and vegetables ix. Artificial dehydration of fruits and vegetables x. Radiation preservation of fruits and vegetables xi. Manufaclllrc offruiVvegetable juices and their concentrates squashes and powders xii. Manufacture of sauces jams, jellies and mannalades etc. xiii. Canning of fruits and vegetables xiv. Fruits and vegetables preservation ne.c. xv. Processing. canning. and preserving of fish, crustacea and similar foods xvi Flour milling by power machine xvii. Other grain milling and processing activities n.e .. c xviii. Production of conunon salt xix. Manufaclllrc of Cocoa products xx. Manufacture of starch and its derivatives B-37 MANUFACfURE OF COTTON TEXTILES Cotton spinning. weaving and processing in integrated mills

B-38 MANUFACTURE OF WOOL, SILK AND MAN-MADE FlBRE TEXTILES i. wool spinning. weaving & processing in integrated mills ii. Spinning. weaving & processing of silk textiles. in integrated mills iii. spinning of staple fibres in mills iv. Spinning of staple fibres and weaving of artificiaVsynthetic textile fabrics in mills v. Weaving and prooessing bleaching. dyeing and printing., of artificiaVsynthetic textile fabrics in mills vi. Composite artificial textile fibres mills spinning. weaving. and processing. B-39 MANUFACfURE OF TEXTILE PRODUCTS Manufacture of Watec-prooftextile fabrics 840 MANUFACfURE OF BASIC CHEMICALS AND CHEMICAL PRODUCTSEXCEPT PRODUCTS OF

i. ii. iii. iv. v. vi. vii. B-41 i ii. iii.

.iv. v. ~2

i ii. iii. iv. v. vi. vii. viii. B-43 i. ii. iii. iv. v. vi. vii viii. ix. X.

xi. xii. xiii. xiv. XV.

xvi xvii. xviii. xix. XX. xxi. xxii. xxiii.

PETROLEUM & COAL. Manufaclllrc of industrial orgamc and inorganic cbemidJs Manufacture of fertilizers and pesticides Manufaclllrc of plastics in primary forms, manufacture of synthetic rubber Manufaclllrc of paints, vami.sbes, and related pr<>Wcts; artists colours and ink Manufaclllrc of drugs. medicines and allied pr<>Wcts Manufaclllrc of man-made filrcs Manufaclllrc of chemical products ne.c. MANUFACTURE OF RUBBER, PLASTIC, PETROLEUM AND COAL PRODUCTS Tyre and tube inlilstries Manufaclllrc of rubber products ne.c. Manufaclllrc of plastic products ne.c. Manufaclllrc of coke oven pr<><Dcts Manufaclllrc of other coal and coal-tar products ne.c. MANUFACfURE OF METAL PRODUCTS AND PARTS EXCEPT MACHINERY AND EQUIPMENT Manufacture of railway and ship containers used in contain« - traffic

manufacture of gas cylinders industrial or house-hold. MaruJfaclllrc of tanks. reservoirs and containers of metals ne.c Manufacture of reinforced safes, vaults. stron~ doors and gates and the likes Manufacture of steel trunks Manufaclllrc of sanitary and plumbing fixtures and fitting of metals MaruJfaclllrc of other fabricated melal products ne.c Foreign, pressing. stamping and rollforming of metal, power metallurgy MANUFACTURE OF MACIUNERY AND EQUIPMENT OTHER THAN TRANSPORT EQUIPMENT Manufacture ofagriwltural machinery and equipment and parts thcR of Manufaclllrc of machinecy and equipment used by construction and mining industries Manufacture of prime movers. boilecs Manufacture of industrial machinery for food and textile industries including bottling and filling machinery. Manufacture of inlilstrial machinecy for othec than food and textile industries Manufacture of refrigecators, air-conditioners and fire fighting equipment and their parts and accessories Manufaclllrc of general pwpose non electrical machinery/equipment, their components and accessories n.e.c Manufaclllrc of machine tools,1heir parts and accessories Manufaclllrc of office. computing and accounting machinecy and parts Manufaclllrc of sewing and knitting machines Manufaclllrc of weighing macimcry Manufaclllrc of washing and lalmdering machines including cen1rifugal clothes driers. Manufaclllrc offiltaing and ruifYing rnachinety for liquids and gases Manufaclllrc of distilling and rec:tiJYing plants including heat exchangers. Manufaclllrc of parts and accessories ne.c for special purpose non-electrical machinery/equipment ne.c Manufaclllrc of othec special purpose non-electrical machinecy/equipment ne.c Manufaclllrc of electrical induslrial machinery apparatus and parts thereof MaruJfaclllrc of insulated wares and cables, including manufacture of optical fibre cables MaruJfacture of accunwlators primary cells and primary batteries Manufaclllrc of ultra-violet or infra-red lamps Manufaclllrc of discharge lamps; florescent, hot-cathode or other discharge lamps Manufaclllrc of arc lamps Manufacture of flash bulbs used in photography LAND TRANSPORT SUPPORT SERVICES.

Supporting services to land transport, lil;.e operation of highway bridges, toU roads

302

B-45 WATER TRANSPORT SUPPORT SERVICES. Support services to water-transport like operation and maintenance of piers, loading & discharging of vessels B-46 SERVICES INCIDENTAL TO TRANSPORT NOT ELSEWHERE CLASSIFIED i. Cargo handling incidental to land transport ii. Cargo lw111ling incident to water transport iii. Cargo handling incidental to air transport iv. Renting and leasing except fmancialleasing. of motor vehicles, without operator for passenger transport v. Renting and leasing except financial leasing. of motor vehicles, without operator for freight transport vi. Renting and leasing of refrigerated/cold transport B-47 RENTING AND LEASING NOT ELSEWHERE CLASSIFIED 1. Renting of other transport equipment n.e.c. u. Renting of office accounting and computing machinery and equipment with out operator iii. Renting of other inWstria1 madlinery and equipment B-48 BUSINESS SERVICES NOT ELSEWHERE CLASSIFIED i. Malkc:t rescarcb saviccs ii. Technical testing & analysis services iii. Research & development services excluding basic research and setting up of R&D/academic institutions which would

award degrees/diplomas/certificates. • iv. Health and Medical Services

PART'C' list oflndustrieslltems Eligible for Automatic Approval for F~ Equity upto 74% by RBI C-1 MINING SERVICES i. Oil and Gas field services, except exploration and production services. ii. Services incidental to mining viz. drilling. shafting. reclamation of mines, surveys/mapping - excluding services related to

gold, silver and precious/semiprecious stones. C-2 BASIC METAL&. ALLOYS INDUSTRIES i. Manufacture of iron ore pellets, pig iron, sponge iron and steel in primary/scmi-fmished/fmished forms ii. Manufacture of scmi-fmishcd iron & steel produru in re-coiling miUs, cold-rolling mills and wire drawing mills iii. Manufacture of ferro-alloys iv. Copper ~~~~~mfacturing v. Brass ~~~~~mfacturing vi. Aluminium mamfacturing vii. Zinc manlfacturing viii. Casting ofmc:tal ix. Other non-ferrous metal industries, excluding gold, silver & platin.un C-3 OTIIER MANUFACTURING INDUSTRIES i. Manufacture of medical/surgical ecp1ipment and orthopaedic appliances ii. Manufacture of industrial process control ecp1ipment this class includes manufacture of apparatus used for continuous

mcasurcmcnt and control or wriable such as tempcratwc, pressure, viscosity etc. of materials and products as they are being ~~~~~mfacturcd or otherwise processed.

iii. Manufacture of regulating or oontrolling instrument and apparatus, except industrial process control equipment iv. Manufacture of supply meters for electricity, water or gas v. Manufacture of sensitive balance and mathematical calrolating instruments vi. Manufacture of laboratory and scientific instruments n.e.c. includes manufacture of non-optical mia-oscopes, diffraction

equipments; apparatus for measuring or checking electrical quantities, e.g. oscilloscopes, spectrum analyzers, voltmeters, with or without recording device; apparatus for measuring non-electrical quantities e. g. radiation detectors and counters, cross talk meters and other imlruments specially designed for telecommunications; apparatus for testing the physical properties of materials, e.g. apparatus for testing hardness and other properties of metals, for testing the wear and tear and other properties of textiles and for testing the physical properties of paper, linoleum, plastic, rubber, wood concrete and so forth; apparatus for carrying wt physical or chemical analysis, e.g. polarimeters,refractometer, calorimeters, Orsob's apparatus, Ph-meters, viscometa", surface tension instruments and so forth and instruments and apparatus for measuring or checking the flow, level, pressure or other variables of liquids or gases, e.g. flow meter, level gauges, manometers, heptameters, and so forth except inOOstrial process control equipment

vii. Manufacture of parts and accessories n.e.c. for instruments and apparatus included in the group viii. Manufacture of other medical surgical, scientific and measuring equipment n.e.c. includes manufacture of hydrometers,

thermometers, pedometer, tachometers, balancing machines, test benches, comparators include optical comparators and other optical type measuring and chedUng appliances and instruments.; instruments for checking watches or watch parts and so forth.

ix. Manufacture of photographic, cinematographic and optical goods and equipment excluding photochemical, sensitised paper and film.

x. Manufacture of items based on solar energy like solar cells, cookers, air and water heating systems and other related items C4 ELECTRIC GENERATION AND TRANSMISSION i. Generation and transmission of electric energy produced in hydro-electric power plants ii. Generation and transmission of electric energy procklced in coal-based thermal power plants iii. Generation and transmission of electric energy procklced in oil based thermal power plants iv. Generation and transmission of electric energy procklced in gas based thermal power plants C-5 NON-CONVENTIONAL ENERGY GENERATION AND DISfRIBUTION C-6 CONSTRUCTION i. Construction & Maintenance of roads, rail beds, bridges, tunnels, pipelines, ropeways, ports, harbours and runways ii. Construction & maintenance of water ways and water reservoirs iii. Construction & maintenance hydroelectric projects iv. Construction & maintenance of power plants v. Construction & maintenance of inOOstrial plants C-7 LAND TRANSPORT

Pipeline transport excluding Crude Oil, petroleum products and natural gas pipelines

303

C-8 WATERTRANSPORT i. Ocean and water transport ii. Inland water transport C-9 STORAGE AND WAREHOUSING SERVICE

Warehousing of agrirultura.l products with refrigention cold storages.

APPENDIX 2 INCENTIVE FOR FDI IN POWER SECTOR

Incentives are~ by the govt. of India to foreign investors, who invest in power sector. These incentives are as follows : i Private companies are allowed a debt~uity rate upto 4: I i-e, the equity component should be a minimum of 20% of the

total outlay. ii. The promoter's contribution should be at least 11% of the total outlay. iii Not more than 40% of the total outlay can come from Indian public fmancial institutions. iv. A five year tax holiday has been allowed for profits of new industrial undertakings for either generation or generation for

distribution of power. v. A 16% rate of return on equity in the currency of subsaibcd capital is guaranteed at a Plast Lord Factory (PLf) of 68.5% .

Higher returns arc possible at higher PLF lencla. vi. Licences wiU be given for longer <b-ations, i.e. 30 years in the fllSl instance with subsequent renewals of20 years. vii Capitalization of itaerest during construction at actual cost, will be allowed. Tiais is applicable to expansion project also.

APPENDIX 3 INCENTIVES FOR FDI IN TELECOMMUNICATION INDUSTRY

i FDI in tclccom sector, and Import politics ii Import of all capital goods and component required for manufilcturing allowed without any licence. iii. Import of cordless telephones, EPABXs answering machines and key telephone, permitted against freely tradable

liccnces(SIL). iv. Import of fax machines, ceUular telephones, Radio pagers, trenching Hand sets, video telephone & ISDN terminals allowed

freely without uty licence. v. Telephones, fax machine and telcprimers, telephone switching apparatus and other telecom equipments a subject to 30%

import <lrty. While telephone answering machine is subject to 40% import and components are subject to 20% import duty.

APPENDIX4 INCENTIVES FOR FDI IN ROADS RAILWAYS

i. "Foreign direct investment upto 74% on automatic basis is allowed in selected sectors. ii. S year tax holiday available to companies developing. maintaining of operating infrastructure facilities such as roads.

bridges, new airports, ports, railway projects, and further extended to cover water supply, sanitation, sewerage projects telecom, inWstrial paries and oil exploration ·

iii. Long term capital gains rut by I 0% to boost investment t!Yough the capital nwket route. These investment would be totally exempt from tax if reinvested in certain sectors. . '

iv. ln~rCSSC in tenor of preference shares to enable structuring of senior subordinated debt in infrastructure companies. v. A committee, on infrastrudure, headed by the prime-minister has been constituted, Bendes taking policy initiatives the

committee in all monitor prOgJlllll of major infrastructure projects and remove bottlenecks". So w-ee: India, Investment Promotion and Infrastructure Development Cell, Secretariat for Industrial Assistance (SIA). Department

of Industrial Policy and Promotion, Ministry oflndustry oflndustry Govenunent oflndia, 1997-98, New Delhi.

APPENDIX 5 INCENTIVES FOR FDI IN ROADS, IDGHWAYS AND BRIDGE

1. Concession available for lenders(mvestors in case of roads, highways and bridge ii. "As an incentive to fmant:ial institutions to provide fmancc for the infrastructure projects, deduction upto 40% of their

income from fmancing of these investment is available provided amount is kept in a special reserve. iii. Exemption for infrastructure funds from Income Tax on the incomes from dividend, interest on long term capital gains of

such funds or companies from investment in the form of shares or long term finance in any enterprise set up to develop, maintain and operate an infrastructure facility.

iv. Subsaiption to equity shares or debentures issued by a public company formed and registered in India and the issue is wholly and exclusively for the purposes of developing. maintaining and operating an infrastructure facility, will be eligible for dedication under section 88 of the income tax act, 1961, which permits deduction equal to 20% of the amount subsaibed, form the amount of tax payable by the subsaiber. In case of such investment, the limit of Rs 60,000/ per year under section 88 bas been raised toRs 70,000".1

India, Investment promotion & infrastructure Development Cell, (for Road Secretariat for Industrial Assistance Ministry of Industry, Govenunent of India.

'2£\A

APPENDIX6 PARTICIPATING FINANCIAL INSTITUTIONS

(PFis) TOASSISfS THE INVESTORS Banks I. 2. 3. 4. s. 6. 7.

Bank of Singapore Ud. Chung khiaw ltd. DBS Bank ltd. Far Eastern Bank ltd. Fourscas Bank ltd. Indian Bank Industrial and Conunercial Bank ltd.

8. International Bank of Singapore ltd. 9. Keppel Bank ltd. 10. Lee wah Bank ltd. II. Overseas Chinese Banking co!JIOOition ltd. 12. Overseas union Bank ltd. 13. Standard Chartered Bank 14. Tat lee Bank ltd. IS. United overseas Bank ltd 16. Hongj(.ong and Shanghai Banking corporation ltd. FINANCE COMPANIES I. DBS Fmance ltd. 2. Focal Fmance ltd 3. Great Pacific Finance ltd 4. Hong Leong Finance ltd. S. Keppel Fmance ltd. 6. OCBC fmance s. ltd. 7. Overseas Union Trust hd. 8. Sing Investment and Finance Ltd. 9. Singapore Building Society Ltd. 10. Standard Charted Finance Ud. II. United Overseas Finance. OTHER FINANCIAL INSTITliTIONS I. DBS fiu:tor.lJM.Itd 2. Export aedit insurance corporntion of Singapore

hd. 3. International Fact<n marines. JU.hd 4. International factors.pte.ltd S. Keppel factoo; pte.ltd 6. SAL Industrial leasing ltd. 7. OUB factors pte.ltd. PARTICIPATING FINANCIAL INSTITUTIONS IN LEFS OVERSEAS. I. DBS Bank ltd. 2. Keppel Bank ltd. 3. Overseas Chinese Banking CO!pOOition ltd 4. Overseas Union Bank ltd. S. Standard Chartered Bank 6. Tat lee Bank hd.

7. United overseas Bank ltd.

8. Hong Kong and Shanghai Banking corporation ltd.

APPENDIX -7 INCENTIVES FOR ffiGH-TECH

INDUSTRIES I. Advanced electronics 2. Design, development and manufacture of a. Computer or Peripherals b. Miaoprocessor application 2. Development and production of conununication

equipment 3. Design and production of integrated circuits I C. IL EQUIPMENTIINSTRUMENI'ATION 1. Design, development and manufacture of: a medical equipment b. medical implant or devices c. Scientific equipment 2. Development and production of high pressure

water cutting equipment III. BIOTECHNOLOGY I. Development, testing and production of: a. pharmaceutical

305

b. c. d 2.

fine chemicals food or feed supplements bio diagnostics Development and production of: cell cultures biopolymcrs

a b. 3. Development and production of biotechnology

I.

processesscs for waste treatment AliTOMATION AJ\'D MANUFACfURING SYSTEMS Development and production of:

FLEX IDLE

a. b.

computec p-ocess control systems/equipment process instrumentation

c. d v.

robotic ~ipment computer mmerical control CNC. machine tools ELECTRO.OPTICS AND NON-LINEAR OPTICS .

1. Development and production of: a. Opticallenses b. laser application equipment c. fibre-optic communication equipment VL ADVANCED MATERIALS I. Application or production of : a. polymers or biopolymcrs b. superconcllctors c. fine ceramics or advanced ceramics d. High strength composites V1L OPTOELECTRONICS I. Development and production of: a. optoelectronics system components b. optical system components c. phOOH:ouplers d semiconductors lasers VIIL SOFTWARE ENGINEERING I. Development and production of a. neural networks b. pattern recognition systems c. rnachinc: vision d. fuzzy logic systems IX. ALTERNATIVE ENERGY SOURCES I. Development and production of: a fuel cells b. polymer batteries c. solar cells d. renewable energy X. AEROSPACE 1. Mawfadure and assembly of aircraft 2. Mamfadure of aira-aft equipment, components,

3. 4.

accessories or parts thereof Modification and oonvcrsion of aircraft Refurbishment or re-manufacture of aircraft equipment, components, accessories or parts tbez-eof

APPENDIX-8 INCENTIVES FOR SMALL SCALE

INDUSTRIES PROCESSING OF AGRICULTURAL PRODUCE I. Cocoa and cocoa products 2. Coffee 3. Tea 4. Cocorart products except copra and crude coconut

oil S. Fruits 6. Vegetables 7. Cer-eal products 8. Starch and proteins 9. Her-bs oc spices 10. Essential oils II. Fodder or ocher animal feed ingredients 12. Tobacco 13. Flowers or ornamental foliage 14. Honey 15. Meat

16. 17. 18. 19. 20.

IL 1.

2. 3.

Ill. l. 2. 3. 4. S. 6.

7. Iv.

l.

v.

1. 2. 3. 4.

S. 6. VL

I. 2.

VII.

I.

2. 3.

4.

vm.

l. 2. IX.

1. X.

1. 2. 3. 4. S. XL 1.

xn.

l. xrn.

Livestock products Aquatic products including seaweed Agricultwal wastes and by-products Aquaculture feed Sugar and confectionery products

FOREST PRODUCT Rattan products excluding rattan poles, peel and splits. . Bamboo products Other forest p~cts

Manufacture ofRubl- products Moulded rubber produas Extruded rubber produas General rubber goods Foam rubber products Intlatalile rubber produ<* Engineering components of rubber e.g. building mounts, anti-vibration mounts. Rubber adhesivc/rubbersealad MANUFACTURE OF PALM OIL, PALM KERNEL OIL AND THEIR DERIVATIVES Margarine, vanaspati, shortening and other manuW:Iurcd fat produas !\1ANUFACTURE OF WOOD AND WOOD

,PRODUCTS Fancy and decorative plywood Tmber mouldinp Builders' carpenlly and joinery Products derived from utilisation of wood waste e.g. activated cbarcoal, wooden briquettes, wood wool. Wooden household and offioc articles Wooden furniture parts and components MANUFACTURE OF TEXTILES AND TEXTILES PRODUCI'S Batik Accessories for the textile industry

MANUFACTURE OF CLAY- AND SAND­BASED PRODUCTS AND OTHER NON­METALLIC MINERAL PRODUCTS Artware, ornaments and articles of ceramic and glass Glass fitting1; for lighting purposes Panels, boards, tiles, blocks and similar articles of vegetable fibre, straw wood shavings or wood wastes, agglomerated with cement plastec or with othcc mineral binding substances Abrasive p~cts g,inding polishing and sharpening MANUFACTURE OF IRON AND STEEL PRODUCTS W~re and wire products of iron and steel Steel fabricated products MANUFACTURE OF NON-FERROUS METALS AND THEIR PRODUCTS WITC and wire products of non-ferrous metals SUPPORfiNG PRODUCTS AND SERVICES Metal forging Madlining Stamping Plating Mould, tDols and dies MANUFACTURE OFHANDTOOLS Hanclools, all types sud! as axes, pliecs, spanners, screwdrivers, wrendacs, hammers, pincers, riveting tDols and other handtools. MANUFACTURE OF MOTOR VEIDCLES, COMPONENTS AND ACCESSORIES All IIIJIOmOtive compoocnts and accessories ASSEMBLY AND MANUFACTURE OF ELECTRICAL AND ELECTRONIC

306

I. 2. 3. 4. s. 6. 7. 8.

xrv. I. 2. XV. l. XVL I. XVIL I.

XVIIL

I. XIX.

I. 2. XX.

I. XXL I. 2.

PRODUCTS AND COMPONENTS AND PARTS Decorative lights Antennaes Capacitors Disc card playen Energy-saving lamps Resistors Power supplies Invertors MANUFACTURE OF KITCHENWARE Kitchenware, all types Tableware MANUFACTURE OF FURNITURE Furniture MANUFACTURE OF TOYS Toys MANUFACTURE OF SOUVENIRS Souvenirs, .handiaafts. giftwares and decorative wares MANUFACTURE OF SPORTS GOODS AND EQUIPMENT Sports goods and equipment. all types MANUFACTURE OF JEWELLERY AND RELATED PRODUCTS JeweUery Processed gems MANUFACTURE OF PLASTIC PRODUCTS Decorative panels and ornaments of plastic MISCELLANEOUS Wax products Patented PVC rain gutters and fittings

APPENDIX- 9 INCENTIVES FOR AGRICULTURAL

PRODUCT L AGRICULTURAL PRODUCTION

I 2. 3. 4. s. 6. 7. 8. 9. 10. 11. 12.

13. 14.

15. 16. 17. 18. 19. 20. IL 1. 2. 3. feed 4. s. 6. 7. 8.

IlL

I.

Cultivation of tea Cultivation of fiuits Cultivation of vegetables, tubers or roots Cultivation of rioc and maize Cultivation of herbs or spices Cultivation of essential oil crops Production of plaming materials Cultivation of crops for animal feed Floriculture Sericulture Apiculture Livestock farming excluding rearing of chickens, ducks or pigs. Production of breeder stock Spawning. breeding and culturing of aquatic products Off-shore ftshing Cultivation of medicinal plants Cultivation of coffee Cultivation of cocoa Cultivation of coconut CultiVation of sago palm INTEGRATED AGRICULTURE Cultivation and processing of tea

. v

Cultivation and processing of herbs or spices Cultivation and processing of crops for animal

Cultivation and processing of medicinal plants Cultivation and processing of aquatic products Apiculture and processing of its produce Cultivation and processing of coffee Cultivation of sago palm and processing of its produce PROCESSING OF AGRICULTURAL PRODUCE Cocoa products

2. oil 3. 4. 5. 6. 7. 8. 9. 10. II. 12. L I. 2. 3. 4. 5. 6. 7. 8. 9.

Coconut products except copra or aude coconut

Fruits Vegetables, tubes or roots Cereal products Starch products Essential oils Livestock or livestock proructs Aquatic products Agrirultural waste or agrirultural by-products Aquarulture feed Plant extracts for phannaceutical, perfumery. AGRICULTURAL PRODUCTION Cultivation of tea Cultivation of fiuits Cultivation of vegetables, tubers or roots Cultivation of rice or maize Cultivation of herbs or spices Cultivation of essential oil aops Production of plaraing materials Cultivation of crops for animal feed Florirulture

10. Serirulture II. Apirulture 12. Livestock farming excluding rearing of chickens,

ducks or pigs. 13. Production of ~Reder stock 14. Spam1ing, !reeding and rulturing of aquatic

products 15. Off-shore ftshing 16. Cultivation of medicinal plants 17. Cultivation of coffee 18. Cultivation of cocoa 19. Cultivation of coconut 20. Cultivation of sago palm n INTEGRATED AGRICULTURE I. Cultivation and p-ocessing of tea 2. Cultivation and p-ocessing ofhcrbs or spices 3. Cultivation and p-ocessing of crops for animal feed 4. Cultivation and p-ocessing of medicinal plants 5. Cultivation and processing of aquatic products 6. Apirulture and processing of its produce 7. Cultivation and processing of coffee 8. Cultivation of sago palm and processing of its

produce

Dl. PROCESSING OF AGRICULTURAL PRODUCE

I. Cocoa products 2. Coconut products except copra or aude coconut oil 3. Fruits 4. Vegetables, tubes or roots 5. Cereal products 6. Starch products 7. Essential oils 8. Livestock or livestock products 9. Aquatic products I 0. Agrirultural waste or agrirultural by-products II. Aquarulture feed 12. Plant extracts for phannaceutical, perfumery,

cosmetic or food inckistries 13. High fructose syrup 14. Coffee products 15. Illipe products IV. FORESTRY AND FORESTRY PRODUCTS I. Cultivation of timber, bamboo or cane 2. Cane products 3. Bamboo products V. MANUFACTURE OF RUBBER PRODUCTS I. Earthmover, agricultural, industrial, commercial

vehicle, motorcycle, airaaft or solid tyres 2. Retreading of airccaft tyres 3. Moulded rubber products

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4.

5. 6. 7. 8. 9. 10.

II. 12. 13. 14.

*15.

u.tex dipped products excluding examination, household or industrial gloves, catheters, swimming caps, balloons, finger costs or toys Exlruded rubber products excluding latex threads. General rubber products Foam rubber products excluding carpet underlay. Rubberised fabrics Inflatable rubber products Conveyor belts, transmission belts, v-type belts or rubber belting Rubber-based elastomeric. special coating Oxidised natural rubber · Thermoplastic natural rubber Deproteinised natural rubber

Catheters, carpet underlay, swimming caps, balloons, finger cots or toys

APPENDIX 10 MULTIMEDIA SUPER CORRIDOR (MSC) OF MALAYSIA

The MSC, which is a IS-by-kilometer (9-by-30 mile) zone extending south from Malaysia's present national capital and business hub, Kuala Lumpur. The MSC is a perfect environment for companies wanting to create, distribute, and employ multimedia products and services. The MSC brings together four key elements: Best possible physical infrastructure, lnclucling, including Kuala Lumpur city Centre, a new world-class airport and integrated

logistics hub, npid rail links to Kuala Lumpur, a smart highway, and two new intelligent garden cities. New laws, policies, and practice, designed to enable and encourage electronic conunerce, facilitate that development of multimedia

applications, and position Malaysia as the regional leader in intellectual property protection. High-capacity global telecommunications and logistics infrastructure buih on the MSC's 2.5-gigabit-to-1 0-gigabit digital optical fiber

backbone and using the latest ATM switches to provide fiber to the Building. This network will have gigabit international gateway with directed links to the US, Europe, and Japan, as well as the other nations in ASEAN.

Fully empowerecl one-stop shop 0 the Multimedia Development Corporation (MDC)' created to manage and market the MSC. The MDCOs mission is to create the best environment in the world for private-sector companies to pioneer the development and use of multimedia.

The Malaysian Govcmment has targeted sever multimedia applications for development by 2000. These Flagship Applications, are : electronic govemmcol, telemedicine, smart schools, a multipurpose card, R&D clusters world-wide manufacturing webs, and borderless marketing centres. MalaysiaOs Multimedia Development Corporation (MDC) is driving this bold initiative. The MDC is fully empowered Done stop super shopO wholly focused on stop super shopO wholly focused on ensuring the conditional success of the MSC and the companies operating in it. Applications for MSC-status is handled by the MDC.

APPENDIX 11 AGREED MINUTES OF

THE FIRST JOINT COMMISSION BE1WEEN INDIA AND MALAYSIA ON BILATERAL CO-OPERATION

30TH OCTOBER- JRD NOVEMBER, 1992 I. The India-Malaysia Joint Commission established in accordance with Article I of the Agreement between the

Government of Malaysia and the Government of India on The Establishment of A Joint Commission For Bilateral Cooperation signed in Malaysia on 2nd November, 1992 held its First Meeting in Kuala Lumpur on 2nd to 3rd November, 1992. Preparatory to the Joint Commission Meeting, senior officials of both countries held meetings from 30th to 31st October 1992.

2. The Indian delegation was led by His Excellency Eduardo Faleiro, Minister of State for External Affairs while the Malaysian delegation was led by His Excellency Datuk Abdullah Bin Haji Ahmad Badawi, Minister of Foreign Affairs. The rwne of the members of the two delegations appear at Annexure I and II.

3. The Joint Conunission Meeting held extensive discussions on the various issues on the Agenda which appears as Annexure III. The following issues were discussed and agreed upon:-

Trade 4.

5.

6.

7.

8.

The Meeting reviewed the bilateral trade between the two countries and took note of the increase in the value of trade. Both sides agreed on the need to further expand and diversify trade. Both sides agreed that liberalisation of the Indian economy and the rapid industrial development in Malaysia offered a vast rnadtet and more opportunities to intensify and diversity trading relations. Besides engineering goods, meat and meat products, Malaysia could increase its imports of more goods and conunodities from India including marine products, vegetables and fruits, drugs and pharmaceutical goods as well as machinery and transport equipment including two-wheelers and meter gauge railway electric locomotives. India on the other hand could source its imports of manufactured goods such as air-conditioners, TV sets and electrical goods from Malaysia. In order to promote two way trade between the two countries, the meeting welcomed the decision of the Joint Business Cooperation Conunittee of Malaysia and India to convene a meeting in New Delhi in early February, 1993. Malaysia's decision to participate at the lOth Indian Engineering Trade Fair in February, 1993 to be held in New Delhi was also welcomed. Referring to the Agreed Minutes between the Malaysian Minister of Primary Industries and the Indian Minister of State for Commerce signed in August this year, the Malaysian side requested the Indian side to follow through with a contact for the purchase of 300,000 toru1es of palm oil yearly for a period of two years from Malaysia. The Indian delegation clarified that as stated in the Agreed Minutes mentioned above, the purchases would be through their palm oil purchasing organisations following their own producers. The Indian delegation requested that the Malaysian Government consider awarding expeditiously the priority projects to Indian companies in the context of the above mentioned Agreed Minutes. The Malaysian side responded that such projects could be discussed in the framework of the Evidence Account Mechanism referred to in the Agreed Minutes mentioned. The Indian delegation requested that Malaysia's "hold-test-release" procedure on the importation of Indian beef at Malaysian ports of entry be lifted. The Malaysian delegation maintained that the test procedure was imposed to ensure health safety. The Indian delegation proposed that the test procedure be conducted at the country of origin. In this connection, the Indian meat exporters were willing to cover the cost of such tests in India.

The Malaysian delegation took note of the Indian proposal and agreed to refer it for the consideration of its appropriate authorities.

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Investment 9. The Indian delegation provided an extensive briefing on the potential which India olfered as an investment destination

and invited Malaysia's participation in joint ventures in India including areas such as tourist related industries, automobiles, automobile spare parts and component industries.

I 0. The Malaysian delegation welcomed India to invest in resource-based industries, engineering-based auxiliary and supporting industries, the manufacture of precision products and industrial machinery and parts. In the service sector, the Indian delegation was invited to participate in the hotel and filming/movie making industries in Malaysia.

Human Resource Development II. The Malaysian delegation requested India to consider providing short training courses to in-service government officers

in community development, tourism, handicraft, textile manufacturing and agriculture. The Indian delegation took note of the request and proposed that a list of courses of interest to Malaysia be forwarded as soon as possible.

12. On the Indian Cuhural Scholanhip, the Malaysian delegation requested for an earlier notification of the offer by India, as relevant Malaysia agencies required more time for the selection of suitable candidates. The Indian delegation agreed to consider the request.

13. With regard to the request for additional medical seats in Indian medical colleges, the Indian delegation took note of the request. It pointed out that the availability of medical seats were limited and it was after great deliberation that the Government of India had been able to persuade six medical colleges to offer, in all, !50 seats a year to Malaysia. It suggested that the process for recognising these medical colleges be expediated in order to avail the seats on offer.

14. To promote closer cooperation in the field of education, the Indian delegation requested Malaysia to recognise Indian degrees in the fields of Engineering, Law and Humanities. It also proposed the twinning of Malaysian and Indian universities. The Malaysian delegation took note of these proposals.

15. The Malaysian delegation welcomed the Indian offer to assist KTM in the setting up of a railway training institute in Malaysia. It was noted that KTM's Civil Engineering Personnel were receiving training by the Indian company IRCON.

Health 16. Expressing appreciation for Indian assistance in the faeld of health, the Malaysian delegation requested the cooperation of

the Govenunent of India in the r«:ruitment of more Indian medical specialists, nurses and paramedics on a Government to Governmen' hasis. The ladian delegation agreed to give favourable consideration to the request.

Science and Technology 17. In the field of science and technology, the Malaysian delegation proposed cooperation in the following areas:

development of science cedres, meteorology, microelectronics and technology information and development of software technology parks. The Indian delegation agreed to take up the proposals with the relevant authorities.

Agriculture 18. The Malaysian delegation proposed several areas of cooperation with India, in the fields of livestock, agricultural

research, fisheries, irrigatioo and water management. The Indian delegation suggested that the areas of cooperation proposed be incorporated in the "Memorandum Of Understanding On Cooperation in the Fields of Agriculture". Both delegations expressed the hope that the MOU would be agreed upon soon.

Culture 19. Both delegations agreed that the Draft Cultural Exchange Programme for 1991192 which had been forwarded by India for

Malaysia's consideration should be finalised as soon as possible. Both delegations expressed an interest for an early implementation of a cultural exchange programme.

Transportation 20. Both sides agreed that a second round of negotiations to conclude a Malaysia-India Shipping Agreement should

commence as soon as possible. 21. The Indian delegation expressed keen interest in the Klang Valley Railway Electrification Project (Package F) and hoped

that Malaysia would give favourable consideration to IRCON's bid for the project. The Malaysian delegation agreed to refer the matter to the coocerncd authorities for their consideration.

Power Generation and Transmission 22. The Indian delegation expressed a keen interest in the following Malaysian projects:

(a) The Chenderoh Rehabilitation Project where Bharat Heavy Engineering Ud. (BHEL) of India has been engaged in negotiations with Tenaga National;

(b) The Engineering Consultancy Services for Sultan Salahuddin Abdul Aziaz Power 2 x 500 MW stage III project in which Tata Consulting Engineers (fCE) oflndia have submitted a bid;

(c) The Machine Tool Project in Sepang already under discussion with HMT International, India. The Indian delegation requested the Malaysian Government to permit the BHEL of India further negotiations, in order to finalise the award of the Chaenderoh Rehabilitation Project. The Malaysian delegation took note of these requests by the Indian delegation and agreed to forward the same, to the concerned authorities for their consideration. Petroleum and Petrochemicals 23. Both delegations noted with satisfaction the close cooperation and trading relations between Pctronas and India Oil

Company (IOC). Both sides agreed that this relationship should be further strengthened. The Indian delegation took note of the interest by Petroleum Research Institute (PRI) to carry our more joint-research in the areas of reservoir engineering. seismic studies, pilot plant studies in petrochernicala especially MTBE, polyethylene and polypropylene, material research on composites from CNG tanks, lubricants and additives development, formulation and modification of nitrogenous fertilisers and analytical and instrumentation techniques in the oil and gas industry.

The Indian delegation emphasised the expertise developed by Engjneens India Ud. in the field of petroleum and petro chemicals and its interests in building up a co-operative relationship with Petronas, as well as its interest in the following projects:-PROJECf OWNER Melaka Lateral Gas Pipeline. SepangGas Pipeline Proje<.'t. Management Control Procedures & Operating Manual for Sweet Crude

Petronas Gas Sdn. Bhd. Petronas Gas Sdn.Bhd. Petronas Penapisan

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Refinery at Melaka. Lube Blending Project. Project Management Consultancy (PMC) and Basic Engg. Services of Sour train ofMelaka Refinery. Debottlenecking of Kerteh Refmery. PMC Services for Second Fertilize.-Project.

Petronas

The Malaysian delegation took due note of these interests. 24. The ]oint Conunission Meeting was held in a congenial and co-operative marmer reflecting the friendship between

Malaysia and India. Both delegations recognised the importance of the Joint Commission Meeting and agreed that it should meet on a regular basis.

Date and VenueofNertMeetiiq: Both delegations agreed that the next Joint ~ssion Meeting would be held in India on a mutually convenient date.

APPENDIX 12 AGREEMENT

BETWEEN THE GOVERNMENT OF INDIA

AND THE GOVERNMENT OF MALAYSIA

ON THE ESTABLISHMENT OF A JOINT COMMISSION FOR BILATERAL CO-OPERATION

THE GOVERNMENT OF INDIA AND THE GOVERNMENT OF MAlAYSIA, hereinafter referred to singularly as the "Contracting Party" and collectively as the "Contracting Parties".

CONSIDERING the existing friendly relations between the two countries.

REALISING the need to strengthen the friendly relations and to promote and develop economic, scientific and teclmical co-operation on the basis of equality and mutual benefit

RECOGNISING the necessity to establish a Joint Commission to facilitate and enhance such bilateral relations and C<Hlperation.

CONVINCED that the establishment of the Joint Commission shall serve the common interest and objectives ofboth countries.

HAVE AGREED AS FOLLOWS:

ARTICLE-I The Contracting Parties shall establish a Joint Commission, hereinafter referred to as "the Commission' to facilitate and enhance economic, scientific and technical co-operation between the two countries in areas of mutual interest and benefrt taking into account the advantage as well as the comparative capabilities of each Contracting Party.

ARTICLE-II The co-operation referred to the Article I may include, upon mutual agreement and subject to the ayailability of funds and resources, co-operation in the following areas:

(a) trade and investment; (b) human resource development; (c) health; (d) science and technology; (e) agriculture-, (f) tourism; (g) culture; (h) transportation; (i) power generation and transmission; (j) petroleum and petro-chemicals; and (k) any other areas that may be agreed upon by the Contracting Parties.

ARTICLE-III The Contracting Parties shall conclude specific agreements, for the purpose of the implementation of progranunes or projects to be undertaken, pursuant to the provisions of this Agreement, subject to the laws and regulations for the time being in for-ce in the respective countries.

ARTICLE-IV The Contra~'ting Parties shall encourage the participation of public and private sector organisations, in the programme or projects to be undertaken, pursuant to the provisions of this Agreement

ARTICLE-V The Commission shall consider ways and means to promote and enhance the co-operation, between the two countries and ensure the proper co-operation and implementation of its decision, or recommendation made pursuant to this Agreement

ARTICLE-VI The Commission shall be at the level of Foreign Ministers and shall meet under the Joint Chairmanship of the two Ministers. The composition of the members of each delegation shall be determined by the respective Contracting Parties.

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ARTICLE-VII The Commission shall determine its rules and procedures and may establish working groups to deal with specific subje...1s brought before it.

ARTICLE-VIII The Commission shall meet, subject to mutual agreement, at the request of either Contracting Party, alternately in India and in Malaysia.

ARTICLE-IX A meeting at the level of Senior Officials shall precede the meeting of the Commission which shall consider specific questions and make appropriate recommeodations relating thereto for the consideration of the Commission. The venue and time of such meetings shall be determined by the Contracting Parties.

ARTICLE-X Either Contracting Party may request in writing a revision or amendment of all or part of this Agreement Any revision or amendment agreed to by bodl Contraaing Parties shall be reduced in writing and shall fonn part of this Agreement. Such revision or amendment shall come into effect on such date as may be determined by bodl Contracting Parties.

ARTICLE-XI Any difference or dispute arising out oftbc interpretation or application of the provisions of this Agreement shall be settled amicably by consultation or negotiation, between the Contracting Parties without reference to any third party or international tribunal.

'ARTICLE-XU I. This Agreement shall enter into force on the date of signature. 2. The Agreement between the Government of India and the Government of Malaysia on Economic and Technical co­

o~tion signed on 24th January, 1979 shall be terminated upon the entry into force of this Agreement. 3. This Agreement shall remain in force until such time as it is terminated by either Contracting Party by giving the other

notice in writing. through diplomatic channels, of its intention to terminate the Agreement, at least six months prior to the date of the intended termination.

4. The tennination of this Agreement shall not affect any ageement or undertaking concluded or entered into during the duration of this Agreement, which shall be fulfilled in accord8nce with the provisions of such agreement or undertaking.

IN WITNESS WHEREOF, the undersigned. being duly authorised by their respective Governments, have signed this Agreement. DONE at Kuala Lumpur on this 02 day ofNovanber 1992, in two original texts, in the English language. Two Texts each in Hindi and Bahasa Malaysia will be exchanged through diplomatic channels, all texts being equally authentic. In the event of any divergency, the English text shall prevaiL

FOR THE GOVERNMENT OF INDIA

FOR THE GOVERNMENT OF MALAYSIA

APPENDIX13 MINISTRY OF FINANCE

(Department of Revenue) NOTIFICATION

New Delhi, the 8* August, 1994 INCOME TAX

G.S.R 610 (E) 0 Whereas the annexed Agreement between the Government of the Republic of India and the Government of the Republic of Singapore for the avoidance of double taxation and the prevention of fiScal evasion with respect of taxes on income has entered into force on 2-ft May, 1994 on the notification by both the contracting States to each other of the competition of the procedures required by their respective laws, as required by the said Agreement;

Now, therefore, in exercise ofthe powers conferred by Section 90 ofthe Income-tax Act, 1961 (43 of 1961), the Central Government hereby directs that all the provisions of the said Agreement shall be given effect to in the Union of India.

AGREEMENT BETWEEN

[Notification No. 9580/F. No. 505/1/87-FTD) V.B. SRINIVASAN. 1t. Secy.

THE GOVERNMENT OF THE REPUBLIC OF INDIA AND

THE GOVERNMENT OF THE REPUBLIC OF SINGAPORE FOR

THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION WITH

RESPECT TO TAXES ON INCOME The Government of the Republic oflndia and the Government of the Republic of Singapore. Desiring to conclude an Agreement for the avoidance of double taxation and the preventation of fiscal evasion with

respect to taxes on income. Have agreed as follows:

ARTICLE! PERSONAL SCOPE

This Agreement shall apply to persons who are residents of one or both of the Contracting States. ARTICLE%

TAXES COVERED The taxes to which this Agreement shall apply are: in India : income-tax including any surcharge thereon (hereinafter referred to as Indian tax); in Singapore : the income-tax (hereinafter referred to as Singapore tax). The Agreement shall also apply to any identical or sub-stantially similar taxes which arc imposed by either Contracting State

after the date of Singapore of the present Agreement in addition to, or in place of the taxes referred to in paragraph I. The competent authorities of the Contracting States shall notiJY each other of any substantial changes which are made in their respective taxation laws.

111

ARTICLEJ GENERAL DEFINITIONS

In this Agreement, unless the context otherwise requires: the term India means the territory of India and includes the territorial sea and airspace above it, as well as any other maritime zone in which India has sovereign rights, other rights and jurisdictions, according to the Indian law and in accordance with international law: the term Singapore means the Republic of Singapore;

the terms a Contracting State and the other Contracting State means India or Singapore as the context requires; the term company means any body corporate or any entity which is treated as a company or body corporate under the taXation laws in force in the respective Contracting States; the term competent authority means in the case of India, the Central Government in the Ministry of Finance (Department of Revenue) or their authorised repre~ and in the case of Singapore the Minister for Finance or his authorised representative; the terms enterprise of a Contracting State and enterprise of the other Contracting State mean respectively an enterprise carried on by a resident of a Contracting State and an aUlprise canied on by a resident of the other Contracting State; the term fiscal year means:

in the case of India, previous year as dcfmed under section 3 ofthe Income-tax Act, 1991; (ii) in the case of Singapore, calendar year;

the term international traffic means any transport by a ship or aira'aft operated by an enterprise of a Contracting State except when the ship or airccaft is operated solely between places in the other Contracting State; the term' national means any individual, possessing the nationality of a Contracting State and any legal person, partnership or association deriving its status as such from the laws in force in the Contracting State; the term person includes an individual, a company, a body of persons and any other entity which is treated as a taxable unit under the taxation laws in force in the respective Contracting States; the term tax means Indian tax or Singapore tax, as the context requirea, but shall not include any amount which is payable in respect of any default or omission in relation to the taxes to which this Agreement applies or which represents a penalty imposed relating to those taxes. As regards the application ofthe Agreement by a Contracting State, any term not defmed therein shall, unless the context otherwise requires, have the meaning which it has under the law of that State concerning the taxes to which the Agreement applies.

ARTICLE4 RESIDENT

For the purposes of this Agreement, the term resident of a Contracting State means any person who is a resident of a Contracting State in accordance with the taxation laws of the State. Where by reason of the provisions of paragraph I, an individual is a resident of both Contracting States, then his status shall be determined as follows:-he shall be deemed to be a resident of the State in which he has a permanent home available to him in both States, he shall be deemed to be a resident of the State with which his personal and economic relations are closer (centre of vital interests); if the State in which he has his centre of vital interests cannot be determined, or if he has not a permanent horne available to him in either State, he shall be deemed to be a resident of the State in which he has an habitual abode; if he has an habitual abode in both States or in neither of them, he shall be deemed to be a resident of the State of which he is a national; if he is a national of both States or of neither of them, the competent authorities of the Contracting States shall settle the question by mutual agreement. Where by reason of the provisions of paragraph I, a person oCher than an individual is a resident of both Contracting States, then it shall be deemed to be a resident of the State in which its place of effective management is situated.

ARTICLES PERMANENT EST ABUSHMENT

For the purposes of this Agreement, the term permanent establislunent means a fiXCd place of business through which the business of the enterprise is wholly or partly carried on. 1. The term permanent establishment includes especially:

a place of management; a branch; an office; a factory; a workshop; a mine, an oil or gas well, a quarry or any other place of extraction of natural resources; a warehouse in relation to a person providing storage facilities for others; a farm, plantation or other place where agriculture, forestry, plantation or related activities are carried on; premises used as a sales outlet or for soliciting and receiving orders; an installation or structure used for the exploration or exploration of nature resources but only if so used for a period of more

than 120 days in any fiscal year. A building site or construction, installation or assembly project constitutes a permanent assembly project constitutes a permanent establishment only if it continues for a period of more than 183 days in any fJSCal year. An enterprise shall be deemed to have a permanent establislunent in a Contracting State and to cany on business through that permanent establislunent if it carries on supervisory activities in that Contracting State for a period of more than 183 days in any fiscal year in connection with a building site or construction, installation or assembly project which is being undertaken in that Contracting State. Notwithstanding the provisions of paragraph 3 and 4 an enterprise shall be deemed to have a permanent establishment in a Contracting State and to canyon business through that permanent establislunent if it provides services or facilities in the Contracting State for a period of more than 183 days in any fascal year in connection with the exploration or extraction of natural oils in the Contracting State. An enterprise shall be deemed to have a permanent establishment in a contracting state if it furnishes services, other than services referred to in paragraphs 4 and S of this Article and technical services as defmed in Article 12, within a contracting State through employees of other personnel, but only if:

activities of the nature continue within that Contracting State for a period or periods aggregate more than 90 days in any ftseal year; or

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activities ace preformed for a related enterprise (within the meaning of Article 9 of this Agreement) for a period or periods aggregating more than 30 days in any fJSCal year. Notwithstanding the preceding provisions of this Article, the term permanent establishment shall be deemed not to include:

the use of facilities solely for the purpose of storage, display or occasional delivery of goods or merchandise belonging to the enterprise;

the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of storage, display or occasional delivery;

the maintenance of a stock of goods or lllel"chandise belonging to the enterprise solely for the purpose of processing by another enterprise;

the maintenance of stock goods or merchandise for the purpose of purchasing goods or merchandise, or of collecting information, for the enterprise;

the maintenance of fixed business solely for the purpose advertising. for the supply of information, for scientific research, or for similac activities which have a prqiUlltory or auxiliary cbaractcr, for the enterprise. However, the provisions ofsub-paragPI!Ihs (a) to (e) shall not be applicable where the enterprise maintains any other fixed place of business in the other Contracting State dwugh which the business of the enterprise is wholly or partly carried on. Notwithstanding the provisions of paragraphs 1 and 2, where a person other than an agent of an independent status to whom paragraph 9 applies is acting in a Cordrllcting State on behalf of an enterprise of the othec Contracting State that enterprise shall be deemed to have a permanent establishment in the flfSI -mentioned state, if

he has and habitually exercise in that :State an authority to conduce contracts on behalf of the enterprise, unless his activities ace limited to the purchase of goods or merchandise on behalf of the enterprise; or

he has no such authority, but habitually maintains in the flfSI-mentioned State a stock of goods or merchandise from which he regularly delivers goods or merchandise on behalf of the enterprise; or

he habitually secures ordcn in the flfSt-mentioned State, wholly or almost wholly for the enterprise itself or for the enterprise and other enterprises controlled by, or subject to the same coDUIIOn control, as that enterprise. An enterprise of a Contracting State sball not be deemed to have a pcnnancnt establishment in the other Contracting state merely because it carried on business in that odJer State through a broker, general commission agent or any other agent of an independent status provided that such persons are a:ting in the ordinary course of their business. However, almost wholly on behalf of that enterprise itself or on behalf of that cntcrprisc and other enterprise itself or on behalf of that enterprise and other enterprises controlling. controlled by, or subject to the same common control, as that enterprise, he will not be considered an agent of an independent status within the meaning of this paragraph. ' The fact that a company which is a resident of a Contracting State controls or is controlled by a company which is a resident of the othec Contracting State, or which carries on business in that other Contracting State (whether through permanent establishment or otherwise), shall not of itself constitute wither company a permanent establishment of the other.

ARTICLE6 INCOME FROM IMMOVABLE PROPERTY)

Income derived by resident of Contracting State from immovable property situated in the other Contracting State may be taxed in that other State. The term immovable property shall haw the meaning which it has under the law of the Contracting State in which the property in questions is situated. The term shall in my case include property accessory to immovable property, livestock and equipment used in agricuhure and forestry, rights to which the provisions of general Jaw respecting landed property apply, usufruct of immovable, property and rights to variable or fixed payments as consideration for the working of; or the right to work, mineral deposits, sources and other natmal resources Ships and airaaft shall not be rcgacdcd as immovable property. The provisions of paragraph 1 shall also apply to income derived from the direct use, letting. or use in any other form of immovable property. The provisions of paragraphs I and 3 shall also apply to the income from immovable property of an enterprise and to income from immovable property used for the perfonnance of independent personal services.

ARTICLE7 BUSINESS PROFITS

The profits of an enterprise of a Contrading State shall be taxable only in that State unless the enterprise carries on business in the other Contracting State through a permanent establishment situated therein. If the enterprise carries on business as aforesaid, the profits of the enterprise may be taxed in the other state but only so much of them as is directly or indirectly attributable to that permanent establishment Subject to the provisions of paragraph 3, where an enterprise of a Contracting State cacries on business in the other therein, there shall in each Contracting State be ·attributed to that permanent establishment the profits which it might be expected to make if it were a distinct and sepacatc enterprise engaged in the same or similac activities under the same or similar conditions dealing wholly independently with the enterprise or which it is a permanent establishment In any case where the correct amount of profits, attributable to a permanent establishment is incapable of determination or the determination there of presents, exceptional difficulties, the profits attributable to the pennancnt csSablishment may be estimated on a reasonable basis. In the determination of the profits of a permanent establishment, there shall be allowed as deductions expenses which are incurred for the purposes of the business of the permanent establishment including executive and general administriuive expenses so incurred, whethec in the state in which the permauent establishment is situaled or elsewhere, in accordance with the provisions of and subject to the limitations of the taxation laws of that State. I. Insofac as it has been customary in the Contracting state to determine the profits to be attributed to a permanent establishment on the basis of an appointment of the tolal profits of the enterprise to its various pacts, nothing in paragraph 2 shall preclude that Contracting State from determining the profits to be taxed by such an appointment as may be customary; the method of apportionment as may be customary, the method the apportionment adopted shall, however, be such that the result shall be in accordance with the principles contained ia this Article. 2. No profits shall be attributed to a pennanent establishment by reason of the mere purchase by that permanent establishment of goods or merchandise for the enterprise. 3. For the purposes of the preceding paragraphs, the profits to be attributed to the permanent establishment shall be determined by the same method yea.- by year unless there is good and sufficient reason to the contracy. 4. Where profits include items of income which are dealt with sepacatcly in othec Articles of this Agreement, then the provisions of those Article shall not be affected by the provisions of this Article. 5. For the purpose of paragraph 1, the term directly or indirectly attributable to the permanent establishment includes profits arising from transactions in which the pamanent establishment has been involved and such profits shall be regarded as attributable

313

•

to the permanent establishment to the extend appropriate to the part played by the permanent establishrnenl. in those transactions even if those transactions are made or placed directly with the overseas head otlice of the enterprise rather than with the permanent establishment.

ARTICLES SHIPPING AND AIR TRANSPORT

Profits derived by an enterprise of a Contracting State from the operation of ships or !llrcrafi in international traffic shall be taxable only in that State. The provisions of paragraph I shaD also apply to profits !rom the participation in a gppl, a joint business oc an international operating agency engaged in the operation of ships or aircraft. Interest on funds connected with the operation of ships or aircraft in international traffic shall be regarded as profits derived from the operation of such ships or aircraft, and the provisions of Article II shall not apply in relation to such inten:st. For the purposes of this Article, profits from the operation of ships oc aircraft in international traffic shall mean profits derived from the transportation by sea or air of passengers, mail, livestock or goods carried on by the owners oc lessees or charters of the ships or aircraft, including profits from:

the sale of tickets for such transportation on behalf of other enterprises; the incidental lease of ships or aircraft used in such transportation; the use, maintenance oc rental of containers (including trails and related equipment for the transport of containers) in connection

with such transportation; and any other activity directly connected with such transportation.

Where

ARTICLE9 ASSOCIATED ENTERPRISES

an enterprise of a Contracting State participates directly oc indirectly in the management, control or capital of an enterprise of the other Contracting State, or

the same persons participate directly or indirectly in the management, control or capital of an enterprise of a Contracting State and an enterprise of the other Contracting State. and in either case conditions are made or imposed between the two enterprise in their commercial or fmancial relations which differ from those which would be made between independent enterprises, then any profits which would but for those conditions, have accrued to one of the enterprises, but, by reasons of those conditions have not so accrued, may be included in the profits of that enterprise and taxed accordingly.

ARTICLE 10 DIVIDENDS

Dividends paid by a company which is a resident of a Contracting State to a resident of the other Contracting State may be taxed in that other State. However, such dividends may also be laKed in the Contracting State of which the company paying the dividends is a resident and according to the laws of that State but if the recipient is the beneficial owner of the dividends, the taK so charged shall not exceed:

10 per cent of the gross amount of the dividends if the beneficial owner is a company which owns at about 25 per cent of the shares of the company paying the dividends:

15 per cent of the gross amount of the dividends in all other cases. This paragraph shall not affect the taxation of the company is respect of the profits out of which the dividends are paid.

Notwithstanding the provisions of paragraph 2 of this Article, as long as Singapore does not impose a tax on dividends in additions to the taK chargeable on the profits or income of a company, dividends paid by a company which is resident of Singapore to resident of India shall be exempt from any tax in Singapore which may be chargeable on dividends in addition to the taK chargeable on the profits of the company. The term dividends as used in the Article means income from shares of other rights, not being debt-claims, participating in profits, as well as income from the other corporate income from shares by the laws of the state of which the company making the distribution is resident. The provisions of paragraph I and 2 shall not apply if the beneficial owner ofthe dividends, being a resident of a Contracting State, carries on business in the other Contracting State of which the company paying the dividends is a resident through a performs in that State independent personal services from a fixed base situated therein, and the holding in respect of which the dividends are paid is effectively connected with such permanent establishment or fixed base. In such case, the provisions of Article 7, or Article 14, as the case may be, shall apply. Where a company which is a resident of a Contracting State derives profits or income from the other Contracting State, that other State may not impose any tax on the dividends paid by the company except in so far as such dividends are paid to resident of that other State or so far as the holding in respect of which the dividends are paid is effectively connected with a pemwiCill of which the dividends are paid is etlectively connected with a permanent establishment or a fixed base situated in that other State, nor subject the companys undistributed profits, even if the dividends paid or the undistributed profits consist wholly or partly of profits or income arising in such other State. (a) Dividends shall be deemed to arise in India if they are paid by a company which is a resident of india;

Dividends shall be deemed to arise in Singapore: if they are paid by a company which is resident of Singapore; or if they are paid by a company which is a resident of Malaysia out of profits arising in Singapore and qualifying as

dividends arising in Singapore under Article VII of the Agreement for the Avoidance of Double Taxation between Singapore and Malaysia singed on 2(/' December 1968.

ARTICLE 11 INTEREST

Interest arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State. However, such interest may also be taxed in the Contracting State in which it arises, and according to the laws of that state, but if the beneficial owner of the interest is a resident of the other Contracting State, the tax so charged shall not exceed.

10 per cent ofthe gross amount of the dividends if the beneficial owner is a company which owns at about 25 per cent of the shares of the company paying the dividends;

15 per cent of the gross amount of the dividends in all other cases.

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'The tenn interest used in this Article means income lrom debt-claims of every kind, whether or not secured by mortgage and whether or not carrying a right to participate in the debtors prolits; and in particular, income from government securities and income from bonds or debentures, including premiums and income from bonds or debentures, including premium and prizes attaching to such securities, bonds or debentures. Penalty charges for late payment shall not be regarded as interest for the purpose of this Article. I. The provision of paragraph I and 2 shall not apply if the beneficial owner of the interest, being a resident of a Contracting State, carries on business in the other Contracting State in which the interest arises, through a permanent establishment situated therein, or performs in that other state independent personal, services from a fixed base situated therein, and the debt-claim in respect of which the interest is paid is effectively COMected with such permanent establishment or fixed base. In such cases, the provision of Article 7 or Article 14, as the case may, shall apply. 2. Interest shall be deemed to arise in a Contracting State when the payer is that Contracting State itself, a political sub-division, a local authority, a statutory body or a resident of that State. Where, however, the person paying the interest, whether he is resident of a Contracting State or not has in contracting State a permanent establishment or a fixed base in connection with which the indebtedness on which the interest is paid was incurred, and such interest is borne by such permanent establishment or fixed base is situated. 3. Where, by reason of special relationship between the payer and the beneficial owner or between both of them and some other person, the amount of the interest, having regard to the debt-claim for v.nich it is paid, exceeds the amount which would have been agreed upon by the payer and the beneficial owner in the absence of such relationship, the provisions of this Article shall apply to the last mentioned amount. In such case, the excess part of the payments shall remain taxable according to the laws of each Contracting State, due regard being had to other provision of this Agreement.

ARTICLE 12 ROYALTIES AND FEES FOR TECHNICAL SERVICES

Royalties and fees for technical services arising in a Contracting State and paid to resident of the other Contracting State may be taxed in that other State. However, such royalties and fees for technical services may also be taxed in the Contracting state in which they arise and according to the Jaw of that state, but if the recipient is the beneficial owner of the royalties or fees for technical services, the tax so charged shall not exceed:

in the case of royalties referred to in paragraph 3(a) and fees for technical services as defined in this Article (other than services described in sub-paragraph (b) ofthis paragraph), 15 per cent of the gross amount of the royalties and fees;

in the case of royalties referred to in paragraph 3(b) and fees for technical services as defmed in this article that are ancillary and subsidiary to the enjoyment of property for which royalties under paragraph 3(b) are received, I 0 per cent of the gross amount of the royalties and fees. The tern royalties as used in this Article means payments of any kind received as a consideration for the use of, or the right to use:

any copyright of literacy artistic or scientific work, including cinematography films or films or tapes used for radio or tapes used for radio or television broadcasting, any patent. trade llllllk design or model, plan secret formula or process, or for information concerning industrial, commercial or scientific experience, including gains derived from the alienation of any such right. property or information;

any industrial commercial or scientific equipment. other than payments derived by an enterprise from activities described in paragraph 4(b) or 4(c) of Article 8. The term fees for technical services as used in this Article means payments of any kind to any persons in consideration for services of a managerial, technical or of a consultancy nature (including the provision of such services through technical or other personnel) if such services:

are ancillary and subsidiary to the application or enjoyment of the right. property or information for which a payment described in paragraph 3 is received; or

made available technical knowledge. experience skill, know-how or processes, which enables the person acquiring the services to apply the technology contained therein; of

consists of the development and transfer of a technical design, but excludes any service that does not enable the persons acquiring the service to apply the technology contained therein.

For the purpose of (b) and (c) above, the person acquiring the service shall be deemed to include an agent. nominee, or transfers of such person. Notwithstanding paragraph 4, fees for technical services does not include payments:

for services that are ancillary and subsidiary, as well as inextricably and essentially linked, to the sale of property other than a sale described in paragraph. 3 (a).

for services that are ancillary and subsidiary to the rental of ships, aircraft, containers or other equipment used in connection with the operations of ships or aircraft in imernational traffic;

for teaching in or by educational institutions; lor services for the personal usc of the individual or individual making the payment; to an employee of the person making the payments or to any individuals or firm of individual (other than a company) for

professional services as defmed in Article 14; for services rendered in connection with an installation or strucwre used for the exploration or exploitation of natural resources

referred to in paragraph 2 (j) of Article 5; lor services referred to in paragraph 4 and 5 of Article 5.

The provisions of paragraph I and 2 shall not apply if the beneficial owner of the royalties or fees for technical services, being a resident of a Contracting State, carries on business in the other Contracting State in which the royalties or fees for technical services arise, through a permanent establishment situated therein, or performs in that other State independent personal services from a fixed based situated therein and the right. property or contract in respect of which the royalties or fees technical services are aid is elfectively connected with such permanent establishment or fixed base. In such case, the provisions of Article 7 or Article 14, as the case may be, shall apply. · Royalties and fees for technical services sball be deemed to arise in a Contracting State when the payer is that State itself, a political sub-division a local authority, a statutory body or a resident of that State. Where, however, the person paying the royalties or fees for technical services, whether he is a resident of Contracting State or not, has in Contracting State a pennancnt establishment or a fixed base in connection with which the liability to pay the royalties or fees for technical services was incurred: and such royalties or fees for technical services are borne by such permanent establishment or fixed base, then such royalties or fees for technical services shall be deemed to arise in the State in which the permanent establishment or fixed base is situated. Where, by reason of special relationship between the payer and the beneficial owner of them and some other person, the amount of royalties of fees for technical services paid exceeds the amount. which would have been paid in the absence of such relationship, the

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provisions of this Article shall apply only to the la~-mentioned amount. In such case, the excess part of the payments shall remain taxable according to the laws of each Conlr"ac1ing State, due regard being had to the other provisions of this Agreement.

ARTICLE 13 CAPITAL GAINS

Gains derived by a resident of a Contrac1ing State !rom the alienation of immovable property, referred to in Article 6, and situated in the other Contracting State may be taxed in that other State. Gains !rom the alienation of movable property forming part of the business property of a permanent establishment which an enterprise of a Contracting state has in the other Contracting State or of movable property pertaining to a fixed base available to resident of a Contracting State in the other Contracting state for the purpose of performing independent personal services, including such gains trom the alienation of such a pcnnanent establishment (also or together with the whole enterprise) or a such a fixed ba<;e, may be taxed in that other State. I. Gains from the alienation of ships of aircraft operated in international traffic or movable property pertaining to the operations of such ships or aircraft shall be taxable only in the Contracting State of which the alienation is resident. 2. Gains from the alienation of shares of the· capital stock of s company the property of which consists principally, directed or indirectly of inunovable property situated in a Contracting State may taxed in that State. 3. Gains from the alienation of shares other than those mentioned in paragraph 4 of in company which is a resident of a Contracting State of which the alienator is resident. 4. Gains from the alienation of any property other than that mentioned in paragraph 1,2,3,4 and 5 of this Article and paragraph 3 (b)of Article 12 shall be taxable only in the Contracting State of which the alienator is a resident.

ARTICLE 14 INDEPENDENT PERSONAL SERVICES

Income derived by a individual who is a resident of a Contracting State from the performance of professional services or other independent activities of a similar character shall be taxable only in that State except in the following circumstances when such income may also be taxed in the other Contracting State:

if he has fixed base regularly available to him in the other Contracting State for the purpose of performing his activities; in that case, only so much of the income as is attributed to that fixed base may be taxed in that other State; or

if his stay in the other Contracting state is for a period or periods amounting to or exceeding in the aggregate 90 days in the relevant fiscal year; in that case, only so much of the income as is derived from his activities performed in that other state may be taxed in that other State. The term professional services includes independent scientific, literacy, artistic, educational or teaching activities, as well as the independent activities of physicians, surgeons, lawyers, engineers, architects, dentists and account~.

ARTICLE IS

• DEPENDENT PERSONAL SERVICES Subject to the provisions of Article 16, 18, 19, 20 and 21. salaries, wages and other similar remuneration derived by a resident of a Contracting State in respect of an employment shall be taxable only in that State unless the employment is exercised in the other Contracting State. If the employment is so exercised, such remuneration as is derived therefrom may be taxed in that other State. Notwithstanding the provision of paragraph I, remuneration derived by a resident of Contracting State in respect of an employment exercise in the other Contracting State shall be taxable only in the frrst-mentioned State if:

the recipient is present in the other State for a period or periods not exceeding in the aggregate 183 days in the relevant liscal year; and

the remuneration is paid by, or on behalf of. an employer who is not a resident of the other State; and the remuneration is not borne by a permanent establishment or a fixed base which the employer has in the other State.

In the case of a recipient who satisfied all the conditions undec sub-paragraphs (a), (b) and (c) of paragraph 2,. if this remuneration is deductible as an expense against fees for technical services (dealt with under Article 12) derived by his employer and the employer has no permanent establishment in the other Contra<.1ing State, the remuneration may, notwithstanding the provisions of paragraph 2, by taxed in that State. In such case, the tax/so charged shall not exceed 15% of the gross amount of the remuneration. Notwithstanding the preceding provisions of his Article, remuneration derived in respect of employment exercised aboard a ship or airc-raft operate in international traftic by an enterprise of a Contracting State shall be taxable any in that State.

ARTICLE 16 DIRECTORS FEES

Directors fees similar payments derived by a resident of a Contracting State in his capacity a• member of the board of direc1ors of a company which is a resident of the other Contracting State may be taxed in that other State.

ARTICLE 17 ARTISTS AND SPORT PERSONS

Notwithstanding the provisions of Article 14 and 15 income derived by a resident of a Contracting State as an artist such as theatre, motion, picture, radio or television artist or a musician or as a sport person, from his personal activities as such exercised in the other Contracting State may be taxed in that other State. Where income in respect of or in connectioo with personal ac1ivities exercise by an artists or sports person accur.;e not to the artist• or sports person himself but to another persons, that income may notwithstanding the provisions of Articles 7, 14, and 15, be taxed in the Contracting State in which the activities ofthe artists of sports person are exercised. Notwithstanding the provisions of paragraph I, income derived by an article or a sports persons who is a resident of a Contracting State from his personal activities a• such exercised in the other Contracting State shall be taxable only in the lirst mentioned State, if the activities in the other State are supported wholly or substantially trom the public funds of the lirst mentioned state, including any of its political subdivisions, local authorities or statutory bodies. Notwithstanding the provisions of paragraph 2 and Article 7, 14, and 15, where income in respec1 of or in connection with personal adivities exercised by an artists or a sport~ persons himself but to another person, that income shall be taxable only in the other Contracting State, if that other persons is supported wholly or substantially from the public funds of that other state, including any of its political subdivisions, local authorities or statutory bodies.

ARTICLE 18 REMUNERATION AND PENSION IN RESPECT OF GOVERNMENT SERVICE

I. (a) Remuneration other than a pension, paid by a Contracting State or a political subsidivions, a local authority or a statutory body thereof to an individual in respect of services rendered to that State or sub-division or authority or body shall be taxable only in that State.

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(h) However, such remuneration shall be taxable only in the other Contra~1ing State if the services are rendered in that other State and the individual is a resident of that State who:

i) is a national of that State; or ii) did not become a residem of that State solely for the purpose of rendering the services

2. (a) Any pen.<ion paid by, or out of funds aeated by a Contracting State or a political sub-division, a local authority or statutory body thereof to an individual in respect of services rendered to that State or sub-division or authority or body shall be taxable only in that State. (b) However, such pension shall be taxable only in the other contracting State if the individual is a resident ot: and a national of that

other State. The provision of Article 15, 16 and 19 shall apply to remuneration and pension in respect of services rendered in connection with business carried on by a Contracting State or a political sub-division or a local authority or a statutory body thereof.

ARTICLE 19 NON-GOVERNMENT PENSIONS AND ANNUITIES

Any pension, other than a pension referred to in Article 18, or any annuity derived by a resident of a Contracting State, from sources within the other Contracting State may be taxed only in the first mentioned State. The term pension means a periodic payment made in consideration of past services or by way of compensation for injuries received in the course of performance of services. The term annuity means a stated sum payable periodically at stated times during lite or during a specified or ascertainable period of time, under an obligation to make th~ payments in return for adequate and full consideration in money or moneyOs worth.

ARTICLE20 STUDENTS AND TRAINEES

An individual who is or was a resident of a Contracting State inunediately before making a visit to the other Contracting State and is temporarily present in the other State solely:-

as a student at a recognised university, college, school or other similar recognised educational institutional in that other State; (a) as a business or tecbnicaJ apprentice; or (b) as a recipient of a gJant, allowance or award for the primary purpose of study, research or training from the

Government of eitha- State or from a scientific, educational, religious or charitable organisation or under a technical assistance programme entered into by th'..: Government of either state; shall be exempted from tax in that other State on:

all remittances from abroad for the purposes of his maintenance, education, study, research or training; The amount of such grant, allowance or award; and Any remuneration not exceeding United States Dollars five hundred per month on its equivalent in local currency in respect of

services in that other State provided the services arc performed in connection with his study, research or training or are necessary for the purposes of his maintenance~ The benefits of this Article shall extend only for such period of time as may be reasonable or customarily required to complete the education or training undertaken, but in no event shall any individual have the benefits of this Article for more than five consecutive years from the date of his first arrival in that other Contracting State.

ARTICLE21 TEACHERS AND RESEARCHERS

An individual who is or was a resident of a Contracting State immediately before making a visit to the other Contracting State, or other similar educational institution, visits that other State for a period not exceeding two years solely for the purpose of teaching or research or both at such educational institution shall be exempt from tax in the other State on any remuneration for such teaching or research. This Article shall not apply to income from research if such research is undertaken primarily for the private benefit of a specific person or persons.

ARTICLE22 INCOME OF GOVERNMENT

The Government of a Contracting State shall be exempt from tax in the other Contracting State in respect of income derived by that Goverrunent from sources within the othel" State. The types of income to which paragraph I applies are:­

dividends under Article I 0; interest under Article II ; and any other income or gains derived from transactions not pursuant to the conduct of commercial activities.

For the purpos.:s of paragraph I, the term Goverrunent:-in the case of Singapore means the Government of Singapore and shall include:

the Monetary Authority of Singapore and the Board of Commissioners of Currency; the Government of Singapore Investment Corporation Pvt. Ltd. to the extent it is not engaged in the conduct of

commercial activities; a statutory body not engaged in the conduct of commercial activities; any other institution or body as may be agreed from time to time between the competent authorities of the Contracting

States;

in the case of India means the Government of India and shall include:­the Goverrunent of the States and the Union Territories oflndia;

States.

the Reserve Bank oflndia or any of its subsidiaries which is not engaged in the conduct of commercial activities; a statutory body not engaged in the conduct of commercial activities; any other institution or body as may be agreed from time to time between the competent authorities of the Contracting

ARTICLE2J INCOME NOT EXPRESSLY MENTIONED

Items of income which are not expressly mentioned in the foregoing Article of this Agreement may be taxed in accordance with the taxation laws of the respective Contracting States.

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ARTICLEl4 LIMITATION OF RELIEF

Where this Agreement provides (with or without other conditions) that income from sources in a Contracting State shall be exempt from tax, or taxed at a reduced rate in the Contracting State and under the laws in force in the other Contracting State the said income is subject to tax by reference to the amount thereof which is remitted to or received in that other Contracting State and not by reference to the full amount thereof, then the exemption or reduction of tax to be alloweJ under this Agreement in the first-mentioned Contracting State shall apply to so much of the income as is remitted to or received in the other Contra~1iilg State. However, this limitation does not apply to income derived by the Government of a Contracting State or any person approved by the competent Authority of the State for the purpose of this paragraph. Tile term Govenunent includes its agencies and statutory bodies.

ARTICLElS AVOIDANCE OF DOUBLE TAXATION

The laws in force in either of the Contracting States shall continue to govern the taxation of income in the respective Contracting States except where express provision to the contrary is made in this Agreement. Where a resident of India derives income which, in accordance with the provisions of this Agreement, may be taxed in Singapore, India shall allow as a deduction from the tax on the income of that resident an amount equal to the Singapore tax paid, whether directly or by deduction. Where the income is a dividend paid by a company which is a resident of Singapore to a company which is a resident of India and which owns directly or indirectly not less than 25 per cent of share capital of the company paying the dividend, the deduction shall take into account the Singapore tax paid in respect of the profits out of which the dividend is paid. Such deduction in either case shall not, however, exceed that part of the tax (as computed before the deduction is given) which is attributable to the income which may be taxed in Singapore. For the purposes of paragraph 2 of this Article, Singapore tax paid shall be deemed to include any amount of tax which would have been payable but for the reduction or exemption of Singapore tax granted under: the provision of the Economic Expansion Incentives (Relief from Income Tax) Act and the provisions of Section 13 (I) (t), 13 (I) (u), 13 (I) (v), 13 (2), 13A, 13B, 13F, 148, 14C, 14E, 43A, 43C, 430, 43E, 43F, 43G, 43H, 431, 431, and 43K of the income Tax Act, in so far as they were in force and have not been modified since the date of signature of this Agreement, or have been modified in minor respects so as not to affect their general character, any other provisions which may subsequently be enacted 1 .-anting an exemption or reduction of tax which is agreed by the competent authorities of the Contracting State to be a substantially similar character to any provision referred to in sub-paragraph (a) of this paragraph, if such provision has not been modified thereafter or has been modified only in minor respects so as not to affect its general character. Subject to the provisions of the laws of Singapore regarding the allowance as a credit against Singapore tax of tax paid in any country other than Singapore, Indian tax paid, whether directly or by deduction, in respect of income from sources within India shall be allowed as a credit against Singapore tax payable in respect of that income. Where such income is a dividend paid by a company which is a resident of India to a *>ident of Singapore which owns not less than 25 per cent of the share capital of the company paying the dividends, the credit shall take into account Indian tax paid in respect of its profrts by the company paying the dividends. For the purposes of paragraph 4 of this Article the term Indian tax paid shall be deemed to include any amount of tax which would have been payable in India but for a deduction allowed in computing the taxable income or any exemption or reduction of tax granted for that year in question under:

Sections 10 (4), 10 (4B), 10 (5B), 10 (IS} (iv), lOA, lOB, 33AB, 801 and 80 lA, in so far as these provisions were in force and have not been modified since the date of signature of this Agreement, or have been modified only in minor respect so as not to affect their general character.

Any other provision which may subsequently be enacted granting an exemption or reduction of tax which is agreed by the competent authorities of the Contracting States to be of a substantially similar character to a provision referred to in sub-paragraph (a} of this paragraph, if such provision has not been modified thereafter or has been modified only in minor respects so as not to affect its general character. Income which, in accordance with the provisions of this Agreement, is not to be subjected to tax in a Contra~1ing State, may be taken into account for calculating the rate of tax to be imposed in the Contracting State.

ARTICLEl6 NON-DISCRIMINATION

The nationals of a Contracting State shall not be subjected in other Contracting State to any taxation or any requirement connected therewith which is other or more burdensome than the taxation and connected requirements to which nationals of that other State in the same circumstances and under the same conditions are or may be subjected The taxation on a permanent establishment which an enterprise of a Contracting State has in the other Contracting State shall not be less favourably levied in that other State carrying on the same activities in the same circumstances or under the same conditions. This provision shall not be construed as preventing a Contracting State from charging the profits of a permanent establishment which an enterprise of the other Contracting State from charging the profits of permanent establishment which an enterprise of the other Contracting State, nor as being in conllict with the provision of paragraph 3 of Article 7 of this Agreement Enterprises of a Contracting State, the capital of which is wholly or partly owned or coirtrolled, directly or indirectly, by one on more residents of the other Contracting State, shall not be subjected in the first-mentioned State to any taxation or nay requirements connected therewith which is other or more burdensome than the taxation and connected requirements to which other similar enterprises of that first-mentioned State arc or may be subjected in the same circumstances and under the same conditions. Nothing contained in paragraph 1, 2, and 3 of this Article shall be construed as:-

obliging a Contracting State to grant to residents of the other Contracting State any personal allowances, reliefs, reductions and deductions which it grants to its own residents;

affecting any provisions of the tax laws of the respective Contracting States regarding the imposition of tax on non-resident persons as such;

obliging a Contracting State to grants to nationals of the other Contracting State those personal allowances, relief, reductions and deductions for tax purposes which it grants to its own citizens who are not residents in that State or to such other persons as may be specified in the taxation laws of that State; and

affecting any provisions of the tax laws of the respective Contracting States regarding any tax concessions granted to persons fultilling specified conditions. In this Article, the term taxation means taxes which are the subject of this Agreement.

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ARTICLE27 MUTUAL AGREEMENT PROCEDURE

Where a resident of a Contracting State considers that the actions of one or both of the Contracting States result or will result for him in taxation not in accordance with this Agreement, he may notwithstanding the remedies provided by the national la\\'S of those States, present his case to the competent authority of the Contracting State or which he is a resident This case must be presented within three years of the date of receipt of notice of the action which gives rise to taxation not in accordance with the Agreement. The competent authority shall endeavour, if the objection appears to it to be justified and if it is not itself able to arrive at an appropriate solution, to resolve the case by mutual agreement with the competent authority of the other Contracting State, with a view to avoidance of taxation not in accordance with the Agreement Any agreement reached shall be implemented notwithstanding any time limits in the nationalla....-s of the Contracting States. The competent authorities of the Contracting States shall endeavour to resolve to resolve by mutual agreement any difficulties or doubts arising as to the interpretation or application of the Agreement. They may also consult together for the elimination of double taxation in cases not provided for in the Agreement. The competent authorities of the Contracting States may communicate with each other directly for the purpose of reaching an agreement in the sense of the preceding paragraphs. When it seems advisable in order to reach agreement to have an oral exchange of opinions, such exchange may take place through a Commission consisting of representatives of the competent authorities of the Contracting States.

ARTICLE28 EXCHANGE OF INFORMATION

The competent authorities of the Contracting States shall exchange such information (including documents) as is necessary for carrying out the provisions of this Agreement or of the domestic laws of the Contracting States concerning taxes covered by the Agreement, in so far as the taxation there under is not contrary to the Agreement, in particular foc the prevention of fraud or evasion of such taxes. Any information received by a Contracting State shall be treated as secret in the same manner as information obtained under the domestic la....-s of that State. However, if the information is originally regarded as secret in the transmitting State, it shall be disclosed only to persons or authorities (including courts and administrative bodies) involved in the assess~ or collection of, the enforcement or prosecution in respect o( or the determination of appeals in relation to, the taxes which are the subject of the Agreement Such persons oc authorities shall use the information in l'ublic court proceedings or in judicial decisions. The exchange of information or documents shall be either on a routine basis or on request with reference to particular cases or both. In no case shall the provisions of paragraph I be construed so as to imp.,. on a Contracting State the obligation:-

to carry out administrative measures at variance with the la....-s or administrative practice of that or of the other Contracting State;

to supply information or documents which not obtainable under the la....-s or in the normal course of the administration of that or of the other Contracting State;

to supply information or documents which would disclose any trade, business, industrial course of the administration of that or trade process or information the disclosure of which would be contrary to public policy.

ARTICLE29 DIPWMATIC AND CONSULAR OFFICIALS

Nothing in this Agreement shall affect the fiscal privileges of diplomatic or consular officials under the general rules of international law or under the provisions of special agreements.

ARTICLEJO ENTRY INTO FORCE

Each of the Contracting States shall notifY the other the completion of the procedures required by its law for the bringing into force of this Agreement This Agreement shall enter into force on the date of the later of these notifications and shall thereupon have effect:

in India, in respect of income arising in any fiscal year beginning on or after the first day of April 1994. In Singapore, in respect of income arising in any fiscal year beginning on or after the fJ.rst day of January 1994.

The Agreement between the Government the Republic of India and the Government of the Republic of Singapore for the avoidance of double taxation and the prevention of fiScal evasion with respect of taxes on income signed in Singapore on 201h April, 1981 shall terminate and cease to be effective from the date on which this Agreement comes into effect

ARTICLEJl TERMINATION

This Agreement shall remain in force indefmitely but either ofthe Contracting State may, on or before the thirtieth day of June in any calendar year beginning after the expiration of a period of five years frOm the date of its entry into force, give the other Contracting State through diplomatic channels, written notice of termination and, in such event, this Agreement shall cease to have effect:

in India, in respect of income arising in any fiscal year beginning on or after the 1• day of April next following the date on which the notice oftermination is given;

in Singapore, in respect of income arising in any fiscal year beginning on or after the 1• day of January next following the date on which the notice of termination is given IN WITNESS WHEREOF the undersigned, being duly authorised thereto, have signed the present Agreement. DONE in duplicate at India this twenty-fourth day of January, orr thousand nine hundred and ninety-four in the Hindi and English languages, both texts being equally authentic. In the case of divergence between the two texts, the English text shall be the operative one. For the Government of the Republic of India MANMOHAN SINGH

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For the Government of the Republic of Singapore PROF. S. JA YA KUMAR

APPENDIX 14 AGREEMENT

BETWEEN THE GOVERNMENT OF MALAYSIA AND

THE GOVERNMENT OF THE REPUBLIC OF INDIA FOR TilE PROMOTION AND PROTECTION

OF INVESTMENTS

The Government of Malaysia and the Government of the Republic oflndia, hereinafter referred to as the "Contracting Parties;"

Desiring to expand and strengthen economic and industrial cooperation on a long term basis, and in particular, to create favourable conditions for investments by investors of one Contracting Party in the territory of the other Contracting Party;

Recognising the need to protect investments by investors of both Contracting Parties and to stimulate the flow of investments and individual business initiative with a view to promoting the coonomic prosperity of both Contl'lu:ting Parties:

Have agreed as follows;

I. For the purpose of this Agreement:

Article-I Definitions

(a) "Investments" means every kind of asset invested in accordance with the laws, regulations and national policies of the Contracting Parties in whose territory the investment is made and in particular, though not exclusively, includes:

(i) movable and immovable property and any other property rights such as montages, liens or pledges; (ii) shares, stocks and debentures of companies or interests in the property of such companies; (iii) right• to money or a claim to any performance having fu~ancial value; (iv) int--i!o~,1uaJ property rights, including rights with respect to copyrights, patents, trademarks, trade names, industrial

designs, trade scacts, technical proposes and know-how and goodwill in accordance with the relevant laws of the respective Contracting Party;

(v) business concessions conferred by law or under contract, incruding concessions to search for, cultivate, extract, or exploit natural resources.

(b) "returns" means the amount yielded by an investment and in particular, though not exclusively, includes profits, interests, capital gains, dividends, royalties or fees;

(c) "investor" means any national or company of a Contracting Party; (d) "national" means any natural person possessing the citizenship of or pennancntly residing in the territory of a Contracting

Party, and not having the citizenship of the other Contracting Party, in accordance with its laws; (e) "company" means any corporation, partnership, trust, joint-venture, organisation, association or enterprise incorporated or

duly constituted in accordance with applicable laws of the Contracting Party;

(f) "territory" means: (i) with respect to Malaysia, all land territory comprising the Federation of Malaysia, the territorial sea, its bed

and subsoil and airspace above; (ii) with respect to India, the territory of the Republic of India including its territorial waters and the airspace

above it and other maritime zones including the Exclusive Economic Zone and continental shelf over which the Republic of India has sovereignty, sovereign rights or jurisdiction in accordance with it~ laws in force, the 1982 United Nations Convention on the Law of the Sea and International Law;

(g) "freely usable currency" means the United States dollar, pound sterling. Deutschemark, French franc, Japanese yen or any other currency that is widely used to make payments for international transactions and widely traded in the international principle exchange markets.

2. Any alteration of the form in which assets are invested shall not affect their classification as investments, provided that such alteration is not contrary to the approval, if any, granted in respect of the assets originally invested

ARTICLE-2 Promotion and Protection of Investments

I. Each Contracting Party shall encourage and create favourable conditions for investors of the other Contracting Party to invest capital in its territory 8nd, in accordance with its laws, regulations and national policies, shall admit such investments.

2. Investments of investors of each Contracting Party shall at all times be accorded equitable treatment and shall enjoy full and adequate protection and security in the territory of the other Contracting Party.

ARTICLE-3 Treatment of Investments

I. Investments made by investors of either Contracting Party in the territory of the other Contracting Party shall receive treatment which is fair and equitable, and not less favourable than that accorded to investments made by investors of any third State.

2. The provisions of this Agreement relative to the granting of treatment not less favourable than that accorded to the investors of any third State shall not be construed so as to oblige one Contracting Party to extend to the investors of the other the benefit of any treatment, preference or privilege resulting from: (a) any existing or future customs union or free trade area or a common market or a monetary union or similar

international agreement or other forms of regional cooperation to which either of the Contracting Parties is or may become a party; or the adoption of an agreement designed to lead to the formation or extension of such a union or area within a reasonable length of time; or

(b) any international agreement or arrangement relating wholly or mainly to taxation or any domestic legislation relating wholly or mainly to taxation.

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3. Each Contracting Party shal~ subject to its own laws, regulations and national policies, accord to investment of investors of the other Contracting Party treatment no less favourable than that which is accorded to investments of it~ own investors.

ARTICLE-4 Compensation for Losses

Investors of one Contracting Party whose investments in the territory of the other Contracting Party sufier losses owing to war or other armed conflict, revolution, a state of national emergency, revolt, insurrection or riot in the territory of the latter Contracting Party shall be accorded by the latter Contrading Party treatment, as regards restitution, indemnification, compensation or other settlement, no less favourable than that \\hich the latter Contracting Party accords to investors of any third State or to its own investors in accordance with its own laws, regulations and national policies.

ARTICLE-S Expropriation

I. Neither Contracting Party shall take any measures of expropriation or nationalisation or measures having effect equivalent to nationalisation or expropriation (h«einafter referred to as "expropriation") against the investments of an investor of the other Contracting Party except under the following conditions: (a) the measures are taken for a lawful or public purpose in accordance with law; (b) the measures are non-discriminatory; (c) the measures are aa:ompanied by provisions for the payment of adequate and effective compensation without

undue delay. SUch compensation shall amount to the market value of the investments affected immediately before the measures of dispossession because public knowledge, and it shall be freely transferable in freely usable currencies. Any unreasonable delay in payment of compensation shall carry an interest at prevailing commercial rate as agreed upon by both parties unless such rate is prescribed by law.

2. The investor affected shall have a right, under the law of the Contracting Party making the expropriation, to review, by a judicial or other independent uthority of the Party, of his or its case and of the valuation of his or its investment in accordance with the principles set out in this paragraph. The Contracting Party making the expropriation shall make every endeavour to ensure that sud! review is carried out promptly.

3. Where a Contracting Party expropriates the assets or a company which is incorporated or constituted under tl': law in force in any party of its own territory, and in which investors or the Contracting Party own shares, it shall ensure that the provisions of paragraph (I) of Ibis Article are applied to the extent necessary to ensure fair and equitable compensation in respect of their investment to such investors of the other Contracting Party who are owners of those shares.

ARTICLE-6 Transfers

I. Each Contracting Party shal~ llllbject to its laws, regulations and national policies allow without unreasonable delay the transfer in any freely usable cuaency: (a) the net profits, dividends, royalties and technical fees, interest and other current income, accruing from any

investment of the investors of the other Contracting Party; (b) the proceeds from 1bc total or partial liquidation of any investment made by investors of the other Contracting

Party; (c) repayment of any barrowinglllloans, including interest thereon, relating to the investment; and (d) the net earnings and other compensations of nationals of one Contracting Party who are employed and

allowed to work inalllllection with an investment in the territory of the other Contracting Party. 2. The exchange rates applicable to such transfer in the paragraph I of this Article shall be the rate of exchange prevailing at

the time of remittance. 3. The Contracting Party undertake to accord to the transfers referred to in paragraph I of this Article a treatment as

favourable as that accorded to tnnsfer originating from investments made by investors of any third State.

ARTICLE-7 Settlement oflnvestment Disputes Between

A Contractinc Party And An Investor Of The Other Contracting Party

I. Any dispute between an investor of one Contracting Party and the other Contracting Party, in relation on an investment of the former under this Agreement shall, as far possible, be settled amicably through negotiations between the parties to the dispute.

2. Any such dispute which has not been amicably settled within a period of six months may, if both Parties agree, be submitted: (a) for resolution, in aalOfdance with the law of the Contracting party which has admitted the investment to that

C.ontracting party's competent judicial or administrative bodies; or (b) to international conciliation under the Conciliation Rules of the United Nations Commission on International

Trade Law. 3. Should the Parties fail to agree on a dispute settlement procedure provided under paragraph 2 of this Article or where a

dispute is referred to conciliatian but conciliation proceedings are terminated other than by signing of a settlement, the dispute may be referred to Arbill:ation. The Arbitration procedure shall be as follows: (a) if the Contracting l'.ty of the investor and the other Contracting Party are both parties to the Convention on

the Settlement of ilwestment Disputes between States and Nationals of other States, 1965 and the investor consents in writing to submit the dispute to the International Centre for- the Settlement of Investment Disputes such a dispute shall lie referred to the Centre; or

(b) if both parties to the dispute so agree, under the Additional Facility for the Administration of Conciliation, Arbitration and Fad-finding Proceedings; or

(c) to an ad hoc arbitlal tribunal by either party to the dispute in accordance with the Arbitration Rules of the United Nations Commission on International Trade Law, 1976, subject to the following modifications: (i) The appointing authority under Article 7 of the Rules shall be the President, the Vice-President or

the next senior Judge of the International Court of Justice, who is not a national of either Contracting Party. The third arbitrator shall not be a national of eithe~· Contracting Party.

(ii) The parties shall appoint their respective arbitrators within two months. (iii) The arb*al award shall be made in accordance with the provisions ofthis Agreement.

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(iv) The arbitral tribunal shall state the basis of its decision and give reasons upon the request of either party.

ARTICLE-8 Settlement of Disputes Between

The Contractinc Parties I. Disputes between the Contracting Parties concerning the intetpretation or application of this Agreement should, if

possible, be settled through diplomatic channels. 2. If a dispute between the Contracting Parties cannot thus be settled, it shall upon the request of either Contracting Party be

submitted to an arbitral tribunal. 3. Such an arbitral tribunal shall be constituted for cadi individual case in the following way. Within two months of the

receipt of the request for arbitration, each Contracting Party shall appoint one member of the tribunal. Those two members shall then select a national of a third State who on approval by the two Contracting Parties shall be appointed Chairman of the tribunal The Chainnan shall be appointed within two (2) months from the date of appointment of the other two members.

4. If within the periods specified in paragraph 3 of this Article the necessary appointments have not been made, either Contracting Party may, in the absence of any other agreement, invite the President of the International Court of Justice to make the necessary appointments. If the President is a national of either Contracting Party or if he is otherwise prevented from disdw-ging the said function, the Vice-President shall be invited to. make the necessary appointments. If the Vice­President is a national of either Contracting Party or if he too is prevented from discharging the said function, the member of the International Court of Justice next in seniority who is not a national of either Contracting Party shall be invited to make the necessary appointments.

5. The arbitral shall reach its decision by a majority of votes. Such decision shall be binding on both Contracting Parties. Each Contracting Party shall bear the cost of its own member of the tribunal and of its representation in the arbitral proceeding11; the cost of the Chainnan and the remaining costs shall be borne in equal parts by the Contracting Parties. The tribunal may, however, in its decision direct that a higher proportion of costs shall be borne by one of the two Contracting Parties, and this award shall be binding on both Contracting Parties. The tribunal shall determine its own procedure.

ARTICLE-9 Subrocation

Where one Contracting Party or its designated agency has guaranteed any indemnity against non-commercial risk.~ in respect of an investment by any of its investors in the territory of the other Contracting Party and has made payment to such investors in respect of their claims under this Agreement, the other Contracting Party agrees that the fust Contracting Party or its designated agency is entitled by virtue of subrogation to exercise the rights and assert the claims of those investors. The subrogated rights or claims shall not exceed the original rights or claims of such investors.

ARTICLE-tO Applicable Lal'l'll

I. This Agreement shall apply to investments made in the territory of either Contracting Party in accordance with its laws, regulations or national policies by investors of the other Contracting Party prior to as well as after the entry into force of this Agreement.

2. Nothing in this Agreement precludes the host Contracting party from taking necessary measures in Accordance with its laws normally and reasonably applied on a non-discriminatory basis, in circumstances of extreme emergency for the prevention of diseases or pests.

ARTICLE-11 Entry and Sojourn of Personnel

A Contracting Party shall, subject to its laws applicable from time to time relating to the entry and sojourn of non-citizens, permit nationals of the other Contracting Party and personnel employed by companies of the other Contracting Party to enter and remain in its territory for the purpose of engaging in activities connected with investments.

ARTICLE-12 Application of Other Rules

If the provisions oflaw of either Contracting Party or obligations under international law existing at present or established hereafter between the Contracting Parties in addition to the present Agreement contain rules, whether general or specific, entitling investments by investors of the other Contracting Party to a treatment more favourable than is provided for by the present Agreement, such rules shall to the extent that they are more favourable prevail over the present Agreement.

ARTICLE-13 Amendment

This agreement may be amended by mutual consent of both Contracting Parties at any time after it is in force. Any alteration or modification of this agreement shall be done without prejudice to the rights and obligations arising from this agreement prior to the date of such alteration or modification until such rights and obligations are fully implemented.

ARTICLE-14 Entry into Forc:e, Duration and Temunation

I. This Agreement shall enter into force thirty (30) days after the later date on which the Govenunents of the Contracting Party have notified each other that their constitutional requirements for the entry into force of this Agreement have been fulfilled. The later date shall refer to the date on which the last notification letter is sent.

2. This Agreement shall remain in force for a period often (10) years, and shall continue in force, unless terminated in accordance with paragraph 3 of this Article.

3. Either Contracting Party may by giving one (I) year's written notice to the other Contracting Party, terminate this Agreement at the end of the initial ten (10) year period or anytime thereafter.

4. With respect to investment made or acquired prior to the date of termination of this Agreement, the provisions of all of the other Articles of this Agreement shall continue to be effective for a period of ten (10) years from such date of termination.

IN WITNESS WHEREOF, the undersigned, duly authorised thereto by their respective Governments, have signed this Agreement.

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Done in duplicate at Kuala Lumpur this third day of August 1995 in Bahasa Malaysia, Hindi and the English Language, all texts being equally authentic. In case of any divergence of interpretation, the English text shall prevail.

FOR THE GOVERNMENT OF MALAYSIA

APPENDIX 15 INCOME TAX ACT 1967

AND

FOR THE GOVERNMENT OF THE REPUBLIC OF INDIA

PETROLEUM (INCOME TAX) ACT 1967 Double Taxation Relief (India) Order 1976

In exercise of the powers conferred by section 132 (I) of the Income Act 53. Tax Act 1967 and section 65A (I) of the petroleum (lncomc Tax) Act 45/67. 1967, the Minister makes the following order: This ordec may be cited as the Double Taxation Relief(lndia) citation, Ordec 1976. It is declared that the arrangements specified in the Scheduled have Declaration been made with the Government of India with a view

to affording of relief from double taxation in relation to Malaysia tax and India six taxation, (as defined in each case in the arrangements) and that it is expedient that the arrangcmeats shall have effect

sclaeclule {PIIl'II&J'llph 2)

AGREEMENT BE1WEEN THE GOVERNMENT OF MALAYSIA AND THE GOVERNMENT OF INDIA FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION

WITII RESPECT TO TAXES ON INCOME. lbc Government of Malaysia and the Government oflndia, Desiring to conclude an Agreement for the Avoidance ofDouble Taxation and the Prevention of Fiscal Eva•ion with respect to Taxes on Income. Have agreed as follows: Chapter I

SCOPE OF THE AGREEMENT Artidel

PERSONAL SCOPE This agreement shall apply to persons who are residents of one or both the Contracting States.

Artide2 TAXES COVERED

The taxes which are the subject of this Agreement are in Malaysia:

the income tax; the supplementary income tax, that is, tin profits tax, development tax and timber profits tax: and the petroleum income tax, (hereinafter referred to as Malaysian tax);

in India: the income-tax and any surcharge on income-tax imposed under the Income-tax Act, 1961 ( 43 of 1961 ); the surtax imposed under the companies (Profits) Surtax Act, 1964 (7 of 1964 ), (hereinafter referred to as Indian tax).

This Agreement shall also apply to any other taxes of a substantially similar character to those referred to in the preceding paragraph imposed in either Contracting State after the date of signature of this agreement. Al the end of each year, the competent authorities of the contracting states shall notizy to each other any significant changes which have been made in their respective taxation laws.

Ouapterll DEFINITIONS

Artide3 GENERAL DEFINITIONS

In this Agreement, unless the context otherwise requires-the term Malaysia means the Federation of Malaysia and includes any area adjacent to the territorial waters of Malaysia which. in accordance with international law, has been or may hereafter be designated under the laws of Malaysia concerning the Continental Shelf as a sea bed and sub-soil and their natural resources May be exercised; the term India means the territory of India and includes any area adjacent to the territorial waters of India which, in accordance with international law, has been or may hereafter the designated under the laws of India as an bed and sub-soil and their natural resources may be exercised; the terms one of the Contracting States and the other Contracting State mean Malaysia or India, as the context requires; the term tax means Malaysian tax or Indian tax, as the context requires; the term company means any body corporate or any entity which is treated as body corporate for tax purposes under the taxation laws of the respective Contracting States; the term person shall have the meaning assigned to it in the taxation laws of the force in the respective contracting States; the terms Malaysian enterprise and lodian enterprise means rcspcaively an enterprise carried on by a resident of Malaysia and an enterprise carried on by resident of India; the terms enterprise of one of the CoWacting States and crrterprisc of the other Contracting StateD mean a Malaysia enterprise or an Indian enterprise, as the context requires; the term competent authority means, in the case of Malaysia, the Minister of Finance or his authorized representative; and in the case of India, the Central Government in the Ministry of Finance (Department of Revenue and Insurance). 2) In the application of this agrccmc:nt by one of the Contracting States, any term not otherwise, defmed shall, unless the context otherwise requires, have the meaning which it has under the laws of that contracting state relating to the taxes which are the subject of this agreement.

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Article 4 FISCAL DOMICILE

In this Agreement, unless the oontext otherwise requires the tenn resident of Malaysia means

i) an individual who is ordinarily resident in Malaysia, or ii) a pen;on other than an individual who is resident in Malaysia. for the basis year for year of assessment for the purpose of Malaysian tax; (b) the term resident of India means a person who is treated as a resident of India in the previous year for the

relevant assessment year for the pUipose of Indian tax; (c) the terms resident of one of the Contracting States and resident of the other Contracting State mean a

resident of Malaysia or a resident of India, as the context requires. Where by reason of the provisions of paragraph I of this Article an individual is a resident of both Contracting States,

then his residential status shall be determiued in accordance with the following rules he shall be deemed to be a resident of the contracting state in which he has a permanent home available to him. If he has a

permanent home available to him in both contracting states, he shall be deemed to be resident of the Contracting State with which his pen;onal and economic relations are closer;

if the contracting state with \Wich his pen;ona and economic relations are closer cannot be determined, or if he has not a permanent home available to him in either contracting state, he shall be deemed to be resident of the contracting state in which he has an habitual abode;

if he has an habitual abode in both contracting states or in neither of them, he shall be deemed to be resident of the contracting State of which he is citizen;

if he is a citizen of both contacting states or of neither of them, the competent authorities of the contracting states shall determine the questions by mutual agreement.

Where by reasons of the provisions of paragraph I of this article a person other than an individual is resident of both contacting states, then it shall be deemed to be resident of the contracting state in which its place of effective management is situated.

ArticleS PERMANENT ESTABLISHMENT

For the purposes of this agreement, the term "permanent establishment" means a fixed place of business in which the business of the enterprise is wholly or partly carried on.

The tenn "permanent establishment" shall include especially­a place of management; a branch; an ofiice; a factory; a workshop; a warehouse; a mine, oil well, quarry or other place of extraction of natural resources; a building site or construction, installation or assembly project which exists for more than six months; a farm or plantation; a place of extraction of timber or forest produce.

The term "pennanent establishment" shall not be deemed to include; the use of facilities solely for the purpose of storage, display or delivery of goods, or merchandise belonging to the

enterprise; the maintenance of stock of goods or merchandise belonging to the enterprise solely tor the purpose of storage, display or

delivery; the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of processing by

another enterprise; the maintenance of fixed place of business solely for the purpose of purchasing goods or merchandise, or collecting

information, for the enterprise; the maintenance of a fixed place of business solely for the purpose of advertising, for the supply of information, for

scientific research or for similar activities which have a preparatory or auxiliary character, for the enterprise. An enterprise of one of the Contacting States shall be deemed to have a permanent establishment in other Contracting state if-

it carries on supervisory activities in that other contracting state for more than six months in connection with a construction, installation or assembly project which is being undertaken in that other contracting state;

it carries on business which consists of providing the services of public entertainen; (such as stage, motion, picture, radio or television artistes and musicians) or athletes in that other Contracting State unless the enterprise is directly, or indirectly supported, ~lly or substantially, from the public funds of the Government of the ftrst-rnentioned Contracting State in COilllection with the provisions of such services.

Subject of the provisions of paragJaph 6 of this Article, a person acting in one of the Contracting States on behalf of an enterprise of the other Con1racting State shall be deemed to be a permanent establishment in the ftrst-rnentioned Contracting State if-he has, and habitually exercises in that fim mentioned contracting, state, an authority to conclude contracts on behalf of

the enterprise, unless his activities are limited to the purchase of goods or merchandise for the enterprise; or

he maintain in the fim mentioned contracting state a stock of goods or merchandise belonging to the enterprise from which he regularly fills order on behalf of the enterprise.

An enterprise of one of the contra~g States shall not be deemed to have a permanent establishment in the other Contracting State merely because it carried on business in that other Contracting State through a broker, general commission agent or any other agent of an independent status, where such pen;ons are a<-"ting in the ordinary course of their business.

The fact that a company which is a resident of one of the contracting States controls or is controlled by company which is a resident of the other Contracting State or which carries on business in that other Contracting State (whether through a permanent establishment or otherwise), shall not of itself constitute either company a permanent establishment of the other.

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OJapter III TAXATION ON INCOME

Article 6 INCOME FROM IMMOVABLE PROPERTY

Income from immovable property may be taxed in the Contracting State in which such property is situated The term "immovable property" shall be defined in accordance with the law of the contracting State in which the property in

question is situated. The tenn shall in any case include property accessory to immovable property, livestock and equipment used in agriculture and forestry, rights to which the provisions of general law respecting landed property apply, usufiuct of immovable property and rights to variable or fixed payments as consideration for tlte working of, or the right to work, mineral deposits, oil wells, quarries and other places of extraction of natural resources or of timber or forest produce. Ships, boats and aircraft shall not be regarded as immovable property.

The provision of paragraph I of this Article shall apply to income derived from the direct use, letting. or use in any other form of immovable property.

The provisions of paragraphs I and 3 of this Article shall also apply to the income from immovable property of an enterprise. Article 7

BUSINESS PROFITS The income or profits of an enterprise of one of the contracting states shall be taxable only in that contracting State unless the

enterprise carries on business in the other Contracting State through a permanent establishment situated therein. If the enterprise carries on business as aforesaid, tax may be imposed in that other Contracting State on the income or profits of the enterprise but only on so much of that income or Pofits as is attributable to that permanent establishment.

Where an enterprise of one of the Contracting States carries on business in the other Contracting State through a permanent establishment situated therein, there shall in each contracting State be attributed to that permanent establishment the income or profits which it might be expected to make if it were a distinct and separate enterprise engaged in the same or similar activities under the same or similar conditions and dealing wholly independently with enterprise of which it is a permanent establishment.

In the determination of the income or profits of a permanent establishment, there shall be allowed as deduction expenses which are incurred for the purpose of the permanent establishment including executive and general administrative expenses so incurred, whether in the State in which the permanent establishment is situated or elsewhere.

In so far as it has been customary in a Contracting State to determine the income or profits to be attributed to a permanent" establishment on the basis of an apportionment of the total income or profrts of the enterprise to its various parts, nothing in paragraph 2 or paragraph 3 of this Article shall preclude such Contracting State from determining the income or profits to be taxed by such an apportionment as may be customary; the method of appointment adopted shall, however, be such that the result shall be in accordance with the principle laid down in this Article.

No income or profits shall be attributed to permanent establishment by reason of the mere purchase by that permanent establishment of goods or merchandise for the pwpose of export to the enterprise of which it is the permanent establishment.

Where income or profrts include items of income which are dealt with separately in other Articles of this Agreement, then the provisions of those Articles shall not be affected by the provisions of this Article.

Article 8 SHIPPING

Income of an enterprise of one of the contracting States derived from the other Contracting State from the operation of ships in international traffic may be taxed in that other Contracting State, but the tax chargeable in that other Contracting State on such income shall be reduced by an amount equal to fifty per cent of such income.

For the purposes of paragraph I of this Article, income derived from the other contracting State shall mean income from the carriage of passengers, mail, livestock or goods shipped in that other Contracting State: Provides that there shall be excluded the income accruing from the carriage of passengers, mai~ livestock or goods which are brought to that other contracting state solely tor transshipment or tor transfer from an aircraft to ship or form a ship to another ship.

I. Where income from the operation of ships in international traffic is derived by an enterprise of one of the contracting states from a state other than the contracting states, such income shall be taxable only in the contracting state of which the enterprise is resident.

2. The provisions of paragraph 1,2 and 3 of this Article shall likewise apply to income arising from participation in aircraft pools of any kind by such enterprise engaged in air transport operations.

Where

Article 10 ASSOCIATED ENTERPRISES

an enterprise of one of the Contracting States participates directly or indirectly in the management control or capital of an enterprise of the other contracting State; or · ·

the same persons participate directly or indirectly in the management, control or capital of an enterprise of one of the Contracting States and of an enterprise of the other Contracting State,

and in either case, conditions are made or imposed between the two enterprise in their commercial or financial relations, which differ from those which would be made between independent enterprises, then, any income or profits which would but for those conditions have accrued to one of the enterprises, but by reason of those conditions have not so accrued, may be included in the income or profits of that enterprise and taxed accordingly.

Article II DIVIDENDS

Dividends paid by a company which is resident of Contracting State to resident of the other Contracting State may be taxed in the fU'st-mentioned Contracting State.

Where a dividend was paid by a company which was resident in both Malaysia and Singapore and the meeting at which the dividend was declared was held in Malaysia, or where a dividend was paid by a company which was resident in Singapore and at the time of payment of that dividend the company declared itself to be resident of Malaysia for the purpose of Article VII ofthe Agreement between the Government of Malaysia and the Government of the Republic of Singapore lor the Avoidance of Double Taxation and the Prevention of fiscal Evasion with respect of Taxes on

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Income signed in Singapore on 261h De..'elllber-, 1968, the dividend shall be deemed to have been paid by a company not resident in Malaysia.

Where a dividend was paid by a company which was resident in both Malaysia and Singapore and the meeting at which the dividend was declared was held in Singapore, or where a dividend was paid by a company which was resident in Malaysia and at the time of payment of that dividend, the company declared itself to be resident of Singapore for the purposes of Article VII of the agreement between the Govenunent of Malaysia and the Govenunent of the Republic of Singapore for the Avoidance of Double Taxation and the prevention of fiscal evasion with respe'-1 to Taxes on Income signed in Singapore on 2rJ!' December, 1968, the dividend shall be deemed to have been paid by a company not resident in Malaysia.

Nothing in this article shall affect the provision of the law in Malaysia under which the tax in respect of dividend paid by a company resident in Malaysia from which Malaysia tax has been, or has been deemed to be, deducted may be adjusted by reference immediately following that in which the dividend was paid Where a company which is a resident of one of the Contracting States derived income or profits from sources within the other contracting state, there shall not be imposed in that other Contracting State any form of taxation on dividends paid by the company to persons not resident in that other Contracting State or any tax in the nature of an undistributed profits tax on the undistributed profits of the company, whether or not those dividends represent, in whole or in part, income or profits so derived

Article 11 INTEREST

Interest derived by a resident of one of the Contracting States from the other Contracting State may be taxed in that other Contracting State.

Interest shall be deemed to be derived from a contracting state if the payer is the Government, a State Govenunent, a political subdivision, a local authority or a resident of that Contracting State. Where, however, the payer has in the other Contracting State a permanent establislvnent with which the loan or other indebtedness in respect of home by such permanent establishment, then such interest shall be deemed to be derived from the Contracting State in which the permanent establishment is situated In such a case, the provisions of Article 7 shall apply.

Where, owing to a special relationshi;; hetween the payer and the recipient, or between both of them and some other persons, the amount of the interest paid, having regard to the debt-claim for which it is paid, exceed the amount which would have been agreed, upon by the payer and the recipient in the absence of such relationship, the provisions of this Article shall apply only to the last mentioned amount. In that case, the excess part of the payments shall be taxed according to the laws of each contracting state, due regard being had to be other provisions of this Agreement.

The term "interest" as used in this Article means income from Government securities, bonds or debentures, whether or not secured by mortgage and whether or not carrying a right to participate in profits, and debt-claims of every kind as well as all other income assimilated to income from money lent by the taxation law of the state in which the income arises.

Article 13 ROYALTIES

Royalties derived by a resident of one of the Contracting States from the other Contracting State may be taxed in that other Contracting state. Notwithstanding the provisions of paragraph I of this Article, royalties ofthe kind mentioned in clauses (a) and (b) of

paragraph S of this Article and derived from Malaysia by a resident oflndia shall be exempt from tax in Malaysia, if the agreement under which such royalties are payable is approved by the Government of Malaysia after this agreement is signed

Royalties shall be deemed to be derived from a Contracting State if the payer is the Government, a State Govenunent, a political subdivision, a local authority or resident of that Contracting State. Where, however, the payer has in the other contracting State a pennanent establishment with which the right or property giving rise to the royalties is etfectively connected, then, such royalties shall be deemed to be derived from the Contracting State in which the permanent establishment is situated. In such a case, the provisions of a Article 7 shall apply.

Where, owning to special relationship between the payer and the recipient, or between both of them and some other persons, the amount of the royalties having regard to the use, right or information for which they are paid, exceeds the amount which would have been agreed, upon by the payer and the recipient in the absence of such relationship, the provisions of this Article shall apply only to the last mentioned amount. In that case, the excess part of the payments shall be taxed according to the laws of each Contracting State, due regard being had to the other provisions of this Agreement.

The term "royalties" as used in this AJiicle means payment, of any kind received as consideration for the use ot: or the right to use

any patent, trademark. design or model, plan, secret formula or process; industrial, conunercial, or scientific equipment, or information concerning industrial, commercial or scientific

experience; any copyright of literary, artistic or scientific work, cinematography films, or tapes tor television or

broadcasting. but does not include royalties or other amounts paid in respect of operation of mines or quarries or of the extraction or removal of natural resources. Article 14

DEPENDENT PERSONAL SERVICES Subject to the provisions of Article IS, 17 and 18, salaries, wages and other similar remuneration derived by a

resident of one of the Contracting States in respect of an employment shall be taxable only in that contracting state unless the employment is exercised in the othec contracting State. If the employment is so exercised, such remuneration as is derived therefrom rna y be taxed in that other Contra~1.ing State.

I. Notwithstanding the provisions of paragraph I of this Article, an individual who is a resident of Malaysia shall be exempt from tax in India on remuneration in respect of an employment exercised in any previous year in India, if

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he is present in India lor a period or periods not exceeding in the aggregate 183 days during that previous year, and

any period for which he is present within India does not form part of a continuous period of more than 183 days throughout which he is resident of India or residing in India.

the remuneration is paid by, or on behalf ot: an employer who is not a resident of India; and the amount of remuneration is not deductible in computing the income or profrts of an enterprise

chargeable to Indian tax.

Notwithstanding the provisions of paragraph I of this Article, an individual who is a resident of India shall be exempt from tax in Malaysia on remuneration in respect of an employment exercised in any basis year for a year of assessment in Malaysia, if:

he is present in Malaysia for a period or periods not exceeding in the aggregate 183 days during that basis year, and

any period f« which he is present within Malaysia does not form part of a continuous period of more than 183 days throughout which he is present within Malaysia; and

the remunenlion is paid by or on behalf of an employer who is not a resident of Malaysia; and Notwithstanding the preceding provisions of this Article, remuneration in respect of an employment exercised

aboard a ship or aircraft engaged in international traffic and operated by an enterprise of one of the Contracting States may be taxed in that Contracting State.

In relation to remuneration of a director of a company derived from the company, the provisions of this Article shall apply as if the remuneratioo wece remuneration of an employee in respect of an employment.

Article15 DIRECTOR'S FEES

Notwithstanding the provisions of Artide 14, directors fees and similar payments derived by resident of one of the contracting states in his capacity as a mcrnbec of the board of directors of a company which is a resident of the other Contracting State may be taxed in that other Contracting State.

Article 16 ARTISTES AND ATHLETES

Notwithstanding the provisions of Alticle 14, income derived by public entertainers (such as stage, motion picture, radio or television artistes and musicians) or athletes, from their personal activities as such may be taxed in the Contracting State in which these activities are exercised:

Provided that such income shall not be taxed in the said Contracting State ifthe visit of the public entertainers or athletes to that State is directly or indirectly supported, wholly or substantially, from the public funds of the Government, a political sub-division, or a local or statutory authority of either Contracting State.

Article 17 NON-GOVERNMENT PENSIONS AND ANNUITIES

Any pension (other than a pension ofdle kind referred to in Article 18) or any annuity in respect of past services derived by an individual who is a resident of one of the contracting state from the othec Contracting State will be taxable only in the flfSI­mentioned Contracting State.

Article 18 GOVERNMENT REMUNERATION AND PENSION

Remuneration (not being a pension) paid by the Government of Malaysia to any individual who is a citizen of Malaysia in respect of service rendered in the discharge of governmental functions in India shall be exempt from Indian tax. Remuneration (not being a pension) paid by the Government of India to any individual who is a citizen of India in respect of services rendered in the discharge of govanmental functions in Malaysia shall be exempt from Malaysian tax. Any pension paid by the Government of one of the Contracting States to any individual may be taxed in that Contracting State. The provisions of paragraphs I and 2 of this Article shall not apply to payments in respect of services rendered in connection with any business carried on by the Government of either of the Contracting States for the purposes of profit. For the purposes of this Article, the term "Government" shall include any State Government or local or statutory authority of either Contracting State and in particular the Blllk Negara Malaysia and the Reserve Bank oflndia.

Article 19 STUDENTS AND APPRENTICES

An individual who is a resident of one of the Contracting States and who visits the other Contracting State solely as student at a recognized university, college, school cr other similar recognized educational institution in that other Contracting State or as a business or technical apprentice therein, for a period not exceeding five years from the date of his first arrival in that other Contracting State in connection with that visit, shall be exempt from tax in that otber Contracting State on 0

all remittances from abroad for the purposes of his maintenance, education or training; and any remuneration (not exceediag 3,000 Malaysia Dollars or 7,500 Indian Rupees during any basis year or previous year,

as the case may be, for any year of assessment) for personal services rendered in that other Contracting State with a view to supplementing the resources available to him for such purposes. An individual who is a resident of one of the contracting States and who visits the otber contracting state for the purposes of study, research or training solely as recipient of grant, allowance or award from the Government of either of the Contracting States or from a scientific, educational, religious or dlaritable organization or undec a technical assistance progranune entered into by the Government of either of the Contracting States for a period not exceeding five years from the date of his flfSI arrival in that other contracting state, in connection with that visit shall be exempt from tax in that other contracting state on 0

the amount of such grant, allowance or award; all remittances from abroad for the purposes of his maintenance, education or training; and any remuneration (not exceediltg 3,000 Malaysian Dollars or 7,500 Indian Rupees for any basis year or previous year, as

the case may be, for any year of assessment) in respect of services in that other contracting state if the services are performed in connection with his study, research, training or are incidental thereto.

An individual who is a resident of one of die Contracting States and who visits the other contracting state solel.y as an employee of, or under contract with, the Government or an enterprise of the flfSI-mentioned Contracting State solely for the purpose of acquiring technical, professional or business experience for period not exceeding twelve months from the date of his first arrival in that other contracting state in coruaoction with visit shall be exempt in that other contracting state on 0

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all remittances ti·om abroad filr the purposes of his maintenance, education or training; and any remuneration, so far as it is not in excess of 5,000 Malaysian Dollars, or I2,500 Indian Rupees, as the case may he,

lor personal services rendered in that other Contracting State, provided such services are in conne<.1ion with his studies or training or are incidental thereto.

For the purpose of this Article and Article 20 the term "Government" shall have the same meaning as in paragraph 5 of Article 18; an individual shall be deemed to be resident of a Contracting State if he is resident in that Contracting State; in the ha~is

year or the previous year, as the case may be, in which he visits the other Contra<.1ing State or in the immediately Jll"eceding basis year or the previous year.

Article 20 PROFESSORS, TEACHERS AND RESEARCHERS

An individual who is a resident of one of the Contracting State and who, at the invitation of the Government of the other Contracting State or of a university or other recognized educational institution situated in that other Contracting State, visits that other Contracting State lor the primary purpose of teaching or engaging in research, or both, at a university or other recognized educational institution shall be exempt from tax in that other Contracting State on him income from personal services for teaching or research or both at the university or the recognized educational institution, for a period not exceeding two year from the date of his arrival in that other Contracting State. .

I. This Article shall not apply to income from research if such research is undertaken primarily for the private benelit of specific person or persons.

Article 21 INCOME OF GOVERNMENT AND INSTITUTIONS

The Government of one of the Contracting State shall be exempt from tax in the other Contracting State in respect of any income derived by such Government from other Contracting State.

For the purposes of paragraph I of this Article, the term "Government" in the case of Malaysia means the Government of Malaysia and shall include

the Govc:rnment of the States; the Bank Negera Malaysia; any such institution or body as may be agreed from time to time between the two Contracting States;

in the case of India means the Government of India and shall include the governments of the States and the Union territories of India; the Reserve Bank oflndia; any such institution or body as may be agreed from time to time between the two Contracting States;

OlapteriV ELIMINATION OF DOUBLET AXATION

Article 22 The laws in force in either of the Contracting States will continue to govern the taxation of income in the respective Contracting

States except where provisions to the contrary are made in this Agreement a) The amount of Malaysian tax payable under the laws of Malaysia, and in accordance with the provisions of this Agreement,

whether directly or by deduction, by a resident of India, in respect of income from sources within Malaysia which has been subjected to tax both in India and Malaysia, shall be allowed as credit against the Indian Tax payable in respect of such income but in an amount not exceeding that proportion b) for the purposes of the credit referred to in sub-paragraph a) above, there shall be deemed to have been paid by the resident

oflndia-the amount tax which would have been paid in respect of royalties but for the exemption provided in paragraph 2 of Article 13; and the amount of tax which would have paid if the Malaysian tax had not been reduced or relieved in accordance with the special incentive measures designed to promote economic development in Malaysia 0

aa) which are set forth in sections 2I, 22, and 26 of the Investment Incentive Act I968 of Malaysia; or

bb) which may be introduced in future in the Income Tax act I967, supplementary Income Tax Act 1967, Petroleum (Income Tax) act 1967 or Investment Incentives act 1968 in modification of or in addition to the existing measures: provided an agreement is made between the two contracting states in respect of the scope of the benefit accorded by the said measures.

3. a) The amount of Indian tax payable, under the laws of India and in accordance with the provisions of this Agreement, whether directly or by deduction, by a resident of Malaysia, in respect of income from sources, within India which had been subjected to tax both in India and Malaysia, shall be allowed as a credit against Malaysian tax payable in respect of such income, but in an amount tax which such income bears to the entire income chargeable to Malaysia tax. h) For the purposes of the credit referred to in sub-paragraph (a) above, there shall be deemed to have been paid by the resident of Malaysia the amount which would have been paid if the Indian tax had not been reduced or relieved in accordance with the special incentive measures designed to promote economic development in India •

in relation to royalties, as set forth in the relevant annual Finance Act India; and in relation to other income, as set forth in the following sections of the Income-tax act 1961 of India or which may be introduced in future in Indian tax laws in modification of or in addition tothe existing measures, provided that an agreement is made between the two Governments in respect of the scope of the benefit accorded by the said measures :

aa) Section 10 (15) (iv) (b) and (c) relating to exemption from six of (a) an approved foreign fmancial institution in respect of interest on money lent by it to an industrial undertaking in India under a loan agreement; and (b) a non-resident in respect of interest on moneys lent or credit lacilities allowed by him to an industrial undertaking in India for the purchase outside India of law material or capital plant and machinery; bb) Section 33 relating to development rebates in respect of ships machinery or plant;

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cc) Section 33 relating to deduction in respe<-1 of profits and gains from eligible industrial undertakings or ships or hotels. dd) Se.."tion !(Ok relating to deduction in respect of dividends attributable to profits and gains from eligible industrial undertakings or ships or hotels; and ee) Section 80M relating to deduction in respect of certain dividends received by a company from a domestic company. This sub­clause shall apply in relation to a company which is a resident of Malaysia only if such company beneficially holds shares (either singly or together with any company controlling it or any company controlled by it) carrying not less than ten per cent of the voting power in the domestic company and the domestic company is an industrial company. any other incentive measure as may be agreed from time to time between the two Contracting States.

OlapterV SPECIAL PROVISIONS

Article 23 NON-DISCRIMINATION

Citizens or nationals of one of the Contracting States shall not be subjected in the other Contracting ~'tate to any taxation or any requirement coMected therewith which is other or more burdensome than the taxation and coMected requirements to which citizens or nationals of that other Contracting State in the same circumstances and under the same conditions are or may subjected. This provisions shall not be contruewd as obligine one of the Contracting States to grant to citizens of the other Contracting State not resident in the rust-mentioned Contracting State those personal allowance, reliefs and reductions for tax purpose which are by law available only to citizens of that first-mentioned contracting state and to such other persons as may be specified in such law who are not resident in that rust-mentioned Contracting State. The taxation on permanent establishment which an enterprise of one of the Contracting States has in the other Contracting State shall not be less favourably levied in that other Contracting State than the taxation !ivied on enterprises of that Contracting State carrying on the same activities in the same circumstances and under the same conditions. Enterprises of one of the Contracting States, the capital of which is wholly or partly owned or controlled, directly or indirectly, by one or more residents of other Contracting State to any taxation or any requirement OOMected therewith which is other or more burdensome than the taxation and ooMected requirements to which other similar enterprises of that rust-mentioned Contracting State are or may be subjected in the same circumstances and under the same conditions. In this Article, the term "citizens or nationals" in relation to a Contracting State means 0 all individuals possessing the citizenship or nationality of that Contracting State; all legal persons, partnership, associations and other entities deriving their status as such from the law in force in that contracting state.

Article24 MUTUAL AGREEMENT PROCEDURE

Where a resident of one of the Contracting States considers that the actions of one or both of the Contracting States resuh or will result in taxation not in accordance with this Agreement, he may, notwithstanding the remedies provided by the taxation laws in force in the Contracting States, present his case to the competent authority of the contracting state of which he is a resident.

The taxation on a permanent establishment which an enterprise of one of the Contracting States has in the other Contracting State shall not be less favourably levied in that other Contracting State than the taxation levied on enterprises of that other Contracting State carrying on the same activities in the same circumstances and under the same conditions. I. Enterprises of one of the Contracting States, the capital of which is wholly or partly owned or controlled, directly or indirectly,

by one or more residents of the other Contracting State, shall not be subjected in the rust-mentioned Contracting State to any taxation or any requirement coMected therewith which is other or more burdensome than the taxation and coMected. requirements to which other similar enterprises of that first-mentioned Contracting State are or may be subjected in the same circumstances and under the same conditions.

2. In this Article, the term "Citizen or nationals" in relations to a Contracting State means 0 all individual possessing the citizenship or nationality of that contracting State; all legal persons, partnership, associations and other entities deriving their status as such from the law in force in that Contracting State.

Article 24 MUTUAL AGREEMENT PROCEDURE

Where a resident of one of the Contracting States considers that the actions of one or both of tbe Contracting States resuh or will result in taxation not in accordance with this Agreement, he may, notwithstanding the remedies provided by the taxation laws in force in the contracting States present his case to the competent authority of the Contracting State of which he is resident The competent authority of the first-mentioned Contracting State shall endeavour, if the objection appears to it to be justified and if it is not itself able to arrive at an appropriate solution, to resolve that case by mutual agreement with the competent authority of the other Contracting State with a view to the avoidance of taxation which is not in accordance with this Agreement. The competent authorities of the Contracting States shall endaevour to resolve by mutual agreement any difficuhies or doubts arising as to the interpretation or application of this Agreement The competent authorities of the Contracting States may communicate with each other directly for the purposes of giving effect to the provisions of this Agreement

Article 25 EXCHANGE OF INFORMATION

The competent authorities of 1he Contracting States shall exchange such information or document as is necessary for carrying out the provisions of this Agreement or for the prevention or detection of evasion or avoidance of the taxes which are the subject of this Agreement. Any information or document so exchanged shall be treated as secret but may be disclosed to persons (including a court or administrative body) concerned with the assessment, collection, enforcement or prosecution in respect to whom the information or document relates.

The exchange of information or documents shall be either on a routine basis or on request with reference to particular cases. The competent authorities of the Contracting States shall agree from time to time on the list of infonnation or documents which shall be furnished on a routine basis.

In no case shall the provisions of paragraph I be construed so as to impose on a Contracting State the obligation: to carry out administrative measures at variance with the laws or administrative practice of that or of the other Contracting State; to supply inlormation or document• which are not obtainable under the laws or in the normal course of the administration of that or of the other Contracting State;

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to supply information or documents which would disclose any trade, business, industrial, commercial or professional secret or trade process or information the disclosure of which would be contrary to public policy.

Artide26 DIPLOMATIC AND CONSULAR OFFICIALS

Nothing in this Convention shall affect the fiscal privileges of diplomatic or consular ofticials under the general rules of international law or under the provisions of special agreements.

OulpterVI FINAL PROVISIONS

AJ1ide27 ENTRY INTO FORCE

This Agreement shall come into t<>rce on the date when the last of all such things shall have been done in Malaysia and India as are necessary to give the Agreement the force of law in Malaysia and India respectively. The Contracting States shall notifY each other of the completion of the requirements mentioned in paragraph I of this Article. The exchange of diplomatic notes certifying that this requirements has been completed shall take place at Kuala Lumpur. Upon the exchange of such diplomatic notes this Agreement shall have effect: in Malaysia-as respect of Malaysian tax for the year of assessment beginning on the J" day of April, 1973 and subsequent year of in India as respect of Indian tax for the year of assessment beginning on the I" day of April, 1973 and subsequent year of

In witness whereof the undersigned, duly authorities thereto, have signed this Agreement.

Done in duplicate at New Delhi this 2Stl1 day of October ofthe year 1976 in the Malay, Hindi and English languages. all the texts being equally authentic, except that in the case of divergence of interpretation the English text shall prevail.

For the Goverrunent of Malaysia

For the Goverrunent of India

PROTOCOL At the time of signing the Agreement between the Government of Malaysia and the Government of India for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect of Taxes of Income, the under.ligned have agreed that as regards income derived from Contracting State by a resident of the other Contracting State from the operation of ships in international tariffs the competent authority of the first-mentioned Contracting State shall accept a certificate issued by the competent authority of the other Contracting State for the purpose of Article 8 of the Agreement. 2. The certificate shall show the following: the gross income from wherever derived: income or loss in respect of shipping operations computed for the purpose of taxation in the other Contracting State; and the total depreciation allowance (excluding any allowance brought forward from a previous period) given by the competent authority of that other Contracting State. Further, it is also agreed that this Protocol shall constitute an integral part of the Agreement In witness whereof the undersigned, duly authorized thereto, have signed this protocol. Done in duplicate at New Delhi on the 2S"' October 1976 in the Malay, Hindi, and English languages, all the texts being equally authentic, except that in the case of divergence of interpretation the English text shall prevail.

For the Govenunent of Malaysia Made this 2-f' Day of December 1976. [Perb. 0. 6869!24 Vol.2; P.N. (PU2

) 80 PliV]

For the Goverrunent of India

TENGKU RAZALEIGH HAMZAH, Minister of Finance

APPENDIX 16 INDUSTRIAL TECHNOLOGY PARK LTD.· BAN GALORE

International Technology Park (ITP) in Bangalorc is the most productive and development oriented investment in the industrial sector of India.; Singapore played a very significant role in the establishment of this technology park. ITP is the outcome of investment by three partners in the form of a joint venture. The three leading partners of ITP flr.ll venture are : a) The Tata Industries Limited. b) Singapore's Information Technology Park Investment Pvl Ltd c) The Karnataka Industrial Area Development Board.

ITP is a world-class, integrated and self contained, Technology Park, which creates a business environment with the best facilities, without any infrastructural and administrative flows.

The well equipped and designed infrastructure not only fulfills the specific requirements of technology oriented companies in electronics, information teclmology, telecommunication and related industries, but also addresses their particular concerns in infrastructural support, power supply and advanced telecommunication facilities. LOCATION OF THE PARK The international Teclmology Park located in white field, is 18 kilometres from Bangalore city centre and 12 from Bangalore airport point Partners in IT Park

The IT PIIIK is the result of inunense homework by Tlllll indusllUs. More than 100 companies in highly diversified business interests including electrical, computer software, steel, chemicals, housing. leisure and tourism, financial agencies, telecommunications, ele~.vonics, process control system and coalfield services. Technology Parks- It is a wholly owned subsidiary of the Jurong Town Corporation, the longest industrial estate developer in Singapore, South East Asia's premier R&D hub, with more than 120 .wltinational corporations. 1. Sembawa11g Imlustrial Si11gapore

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It provides full turnkey services tor civil, building and marine construction proje...1s it has a world-wide ~-ustomer base and a strong presence in the Asia Pacific region. 2. RSP ArchitecJs Pla1mers and Enginetn is one of the largest consultancy practices in the region. It takes proje<-1s, which include change scale residential developments, hotels, office buildings, commercial complexes, institutional, recreational and industrial building. J. L and M, is the leading engineering and construction company in Asia and the longest in Singapore, in terms of total value of overseas contracts. It is a pioneer in innovative construction technology. 5. Parameshwara Holdings, is an investment company. It is involved in investments and trade with India. 6. Karnalaka lnduslrial. AnD lHYdopmml Board (KJADB) provides developed land suitable for industrialisation, promote and assist the orderly development of technology park.

In a nut shell the partner-s in the international technology Park Pvt. Ud. India, with their percentage share can be described as follows Name of Partner I. Tata 2. Government ofKamataka 3. Information Technology Park

Investment Pte. Ltd (ITPI) is consisted of: a. Investment Pvt. Ltd (ITPI) b. Sernbawang Industrial Group c. L&M d. RSP Architects e. PHL

TOTAL

MECHANICAL STRUCTURE

P~ shan in loiDI Uwt!Stmml. 40.00 20.00 40.00

40.00 20.00 14.90 15.10 10.00 100.00

The mechanical structure of the International Technology has four divisions. A) Office ofiTP • B) Commercial and Production Space. C) Residential Unit Amenities and recreational facilities.

COMMERCIAL AND PRODUCTION SPACE is the most important art ofiTP, i.e. 1,72000 sq. mts ofhitech work environment, with 1,35,000 sq. mts. of production space, which is ready to assist electronics, informations technology, telecommunication and related industries.

Phase I of the International Technology Park (ITP) covers a total area o£68,337 sq. mts. It comprises a production block covering 6 floors and an area of35,938 sq. mts. and a ground conuneteial floor space covering 6,454 sq. mts.

The first (I) phase has the capacity of providing employment to more than 4,000 people, which is expected to increase to 15,000 people, when ITP is completed.

The ITP has efficient infrastrudure, business and social amenities and estate management.

The ITP has been designed in a very effective way with a modem technological base. It is made up of the latest high technology performance curtain, walling and cladding solar reflective glazing and silver aluminium wall cladding combined with stainless steel and polished granite. Besides this, ITP's design is also supported by normal cement wall fmishing with tinted single glazing glass windows.

In this way, the best design- techniques have been used in the construction of commercial and production unit. The ITP is also provided with the best infrastructural facilities, which attract most of the technology based companies to

participate. These infrastcuctura1 facilities are-Power- I.T. Park guarantees continuous stable power supply via it's 220 KV power cable and back-up power facility of9 mw and standby diesel generators. Water- Daily/regular supply of potable water. The park also has a 4.5 days water storage capacity to ensure continuous daily supply of water. Teleconmtwrlcations- The park has it's own satellite links for efficient high- speed voice and data transmission. It has an independent exchange of800 lines.

Besides these facilities, I. T. park provides other attractive facilities which can activate the process of production in a regular way, without any sort of delays. Tbcse additional facilities are: A. High capacity efficient passenger and cargo lifts, along with ftre alarms, fire fighting systems and emergency lighting. B. Sheltered loading bays for production.

The maintenance of I.T. park is based on the system used in the Singapore Science Park and Technology Parks in Singapore.

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ITP has negotiated with several financial institutions for attractive financing packages. International Teclmology Palk limited and Kamataka Industrial Area Development Board, Government of Karnataka, have jointly

developed a system to process all the essential facilities fOI" the registration and approvals from various government departments. In this way it provides SINGLE-WINDOW CLEARANCE to all companies, including multinational compantes.

F. I. T.P.L i~ well connected with International Logistic companies, which provides logistic and other support services to the companies in ITP. The palk also helps in providing the best human resources to its clients/companies through the best recruitment agencies. Information Teclmology Palk has 500 companies like AT & T, IBM, Hewlett, Motorola, Texas Instrument~ etc. So the IT Palk's ready built facilities, advanced infrastructure, and one-stop approving authority, offers companies a quick

advantage, removing all teclmical and administrative obstacles.

The state has more than one third of India's overaiii.T. talent pool with higher than average literacy rate. So, companies can get non teclmical statrtor office administration and accounting very easily. Skilled Manpower, including software engineers are available from 9 Universities, S I Engineering Colleges, 169 Polytechnic and 35 Industrial Training Institutes. G. The state ofKarnataka has an annual output of20,000 skilled professionals t:Very year. 6000 are trained in information teclmology

for industries and gearing up facilities to carry out operation.

APPENDIX 17 GURGAONTECHNOLOGYPARK

Mls. Unitech Limited, New Delhi were granted fOI"eign collabonlion approval for setting up a joint venture company for development of a TeChnology Palk at Gurgaon with foreign equity participation of M/s. First Capital Property Venture Pte. Ud., Singapore, a consortium consisting of five companies of SingapOI"C. 1bc sharebolding in the company would be as follows:

HUDA : 30% UNITECH : 30% AND FCPV: 40%

To total project cost is Rs.266.00 crores (approx.) with the main activities of Development, Planning. Management, Sale, Renting, etc. ofteclmology/ Business Palks of Oftice/Commercial and Residential building.

The Teclmology Palk will be modem state of the art international standard Tecbnology Park. The main objective is to attract investment from multinationals and other reputed companies, enterprises from India and abroad to facilitate induction of new technologies, modem management practices and boosting of exports and industrial productivity.2

APPENDIX 18 QUESTIONNAIRE (PERFORMA) FOR INTERVIEW OF JOINT VENTURES I

100% WHOLLY OWNED INDIAN COMPANIES IN SINGAPORE AND MALAYSIA

1. Full address of the company ....... . 2. Nature of company ........ 100% wholly owned Indian company I Joint Venture. 3. Year of establishment ....... . 4. How many partners are involved in the Joint Ventures? ....... . 5. Capital invested at initial stage of investment ....... . 6. Paid up capital ....... . 7. Gross fixed assets at present ....... . 8. Annual turnover ....... . 9. Have you set up any Joint Venture, in other ASEAN countries; if so specify country, product and information asked in

columns (I) to (8) ....... .

10. Your comments regarding the performance ofthe Joint Ventures in the host country ........ . 11. Your principal malket (in order of importance) (a) host country ........ (b) other ASEAN countries ........ (c) Third world

country ........ (d) Western Countries/Blocks 12. Main strengths of operating abroad ....... . 13. Main weaknesses of operating abroad ....... . 14. What are the main constraints in operating abroad? ....... . 15. Observation regarding areas/ products in which Indian frrms can set up Joint Venture/ wholly owned companies in

ASEAN countries ....... . 16. What practical policy proposals/ support mechanism you suggests to promote Joint Venture I wholly owned companies in

the ASEAN countries. (a) Indian policy ........ (b) Host country's policica ....... . 17. Future plans for the expansion of Joint Venture I wholly owned companies or for opening up the new companies in the

ASEAN countries ....... . 18. If your Joint Ventures I wholly owned company enjoys profit, mention the causes and efforts which have been made by

you ....... . 19. If your Joint Venture I wholly owned company faces the problem increase in the cost of production, mention the causes

20. How is the management? ....... . 21. What kind ofteclmology do you use in your Join Venture/ whoUy owned company (a) Capital intensive ......... (b) Labour

intensive ........ (c) Mixed ....... . 22. What is the capital output ratio ....... . 23. Place of our Joint Venture/ wholly owned company in international mad;et ....... . 24. Place of your produ~1 in international malket ....... .

Database Secretariat tor Industrial Assistance (SIA), Department of Industrial Policy and Promotion, Ministry of Industry Government of India July 1998, New Delhi.

332

25. What methods do you adopt to improve the quality of both management and product ....... . 26. Any other information/observation which can be used for the analysis of the performance of Joint venture/wholly o\\ned

company in Singapore/Malaysia ....... . 27. Overall performance of your Joint Venture/wholly owned company ........ .

The idea to form a world class International Technology Park. at Bangalore, emerged during Non-Aligned Movement meeting in 1992 when Ex-Indian prime minister of india Mr. P.V. Narasimha Rao met with Singapore prime minister Mr. Goh Chok Tong. They joint etlorts of Singapore's Economic Development Board's Chairman Mr. Philip Yeo, Singapore business delegation, Tata industries' Chairman Mr. Ratan Tata with his executives and the government of Kamataka in July 1993, resulted in the formation of India's first world class Information Technology Park. at Bangalore on May 2 1992.

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