{"id":305390,"date":"2023-10-21T10:30:39","date_gmt":"2023-10-21T05:00:39","guid":{"rendered":"https:\/\/www.scconline.com\/blog\/?p=305390"},"modified":"2023-10-24T11:45:41","modified_gmt":"2023-10-24T06:15:41","slug":"notification-section-90-1-income-tax-act-mandatory-effect-dtaa-protocol-supreme-court","status":"publish","type":"post","link":"https:\/\/www.scconline.com\/blog\/post\/2023\/10\/21\/notification-section-90-1-income-tax-act-mandatory-effect-dtaa-protocol-supreme-court\/","title":{"rendered":"Notification under Section 90(1) of Income Tax Act mandatory for giving effect to a DTAA or protocol: Supreme Court"},"content":{"rendered":"
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Supreme Court:<\/span> In a bunch of appeals against the decision of Delhi High Court regarding interpretation of the Most Favoured Nation (‘MFN’) clause contained in various Indian treaties with countries that are members of the Organisation for Economic Cooperation and Development (‘OECD’), the Division Bench of S. Ravindra Bhat*<\/span> and Dipankar Datta held that for benefit of same treatment clause in the Double Taxation Avoidance Agreement (‘DTAA’) with OECD members, the date of entering into treaty is the relevant date and not a later date when such country becomes an OECD member:<\/p>\n

Most Favoured Nation (MFN) Clause<\/h2>\n

The Court explained that the MFN clause in such treaties provides for lowering of rate of tax at source on dividends, interest, royalties or fees for technical services (‘FTS’), or restriction of scope of royalty\/FTS in the treaty, similar to concession given to another OECD country subsequently.<\/p>\n

Background<\/h2>\n

The instant matter pertains to bilateral treaties of India with Netherlands, France, and Switzerland. The question arose as to<\/p>\n