MINISTRY OF FINANCE

(Department of Revenue)

NOTIFICATION

New Delhi, the 4th January. 197N

INCOME-TAX

G.S.R. 8(E).—Whereas the Government of India and the

Provisional Military Government of Socialist Ethiopia hive

concluded <in Agreement, as set out in the Annexure herein,

foi the avoidance of double taxation of income of cntc: crises

operuUnK aircraft.

And whereas all the requirements have been completed in

Ethiopia and India as are riec«at,ary to give the said Agreement

ha.s force of law in Ethiopia and India respectively, as required

by paragraph 1 of Article 3 of the said Agreement;

And whereas the letters to this effect have been exchanged

between the said two Governments, as required by paragraph

1 of Article 3 of the said Agreement;

Now, theicfore, in exercise of the powers conferred by

section 90 of the Income-tax Act, 1961 (43 of 1961) and

section 24A of the Companies (Profits) Surtax Act, 1964 (7

of 1964), the Central Government hereby directs that all

the provision; of the said Agreement shall be given effect

to in the Union of India.

ANNEXURb

AGREEMENT

BETWEEN

THE GOVERNMENT OF THE REPUBLIC OF INDIA

FOR

Die Avoidance of Double Taxation of Income ot EntciDilses

Operating Aiicratt

'I he Government of India and the Government of Ethiopia

Desiring to conclude an Agieemcnt for the avoidance of

double taxation of income of entci prises operating aircraft

changeable to tax in the said countries in accordance with

Iheb lespeetive laws.

Have agreed as follows :

Article 1

1. In this Agreement, unle<s the context otherwise requirc-i

(a) the term "Ethiopia"' means the territory of Ethiopia

and the various islands forming pait of Ethiopia, and

include; the territorial sea and any other marine

•ueas adjacent thereto, including their seabed

and

sub-soil, over the resources of which Ethiopia has,

oi may hereinafter have, sovereign rights in accord-

ance with international law ;

(b) the tenn " inJia" means the territory oi India and in-

cludes Ih- territory sea and any other marine areas

adjacent thereto, including their seabed and sub-soil,

o\ci the resources of which India has, or may here-

inafter have, sovereign rights in accordance

with

international law ;

racting State" mean Ethiopia oi India, as the context

requires ;

(d) the term "enterprise of a Contracting Stale" means ;

(i) an nil line designated by the Government of

that

State in pursuance of the Agreement dated 3rd

August, 1967 (as amended or" revised from tune

to time) between the Government of India and the

Government of Ethiopia relating to air services; or

(ii an airline which is authorised by the Government

of that State by a general or special arrangement

between the two Contracting States to

operate

chartered flights between or beyond their territo-

ries;

(t) the- term "international traffic" means any transport

by an aircraft operated by on enterprise of a Cont-

racting Stale, except when the aircraft is operated

sGlely between places in the other Contracting State:

rind

(f) the expression "operation of aircraft" means a busi-

ness of transportation by air of persons, livestock,

goods or mail, carried on by the owners of lessen

or charterers

of aircraft,

including the sale

tickets for such transportation on behalf of othei

enterprises and any other activity directly connected

with such transportation

THE GAZETTE OF INDIA : EXTRAORDINARY

[PART I—SEC. 3(i)]

2. ]n the application of the provisions of this Agreement by

one of the Contracting States, any term used but not defined

heroin shall, unless the context otherwise requires, have

the

meaning which it has under the laws in force in that State

relating to the taxes which are the subject of this Agreement.

Article 2

1. Under this Agreement, income derived by an enterprise

of a Contracting State from the operation of aircraft in inter-

national traffic shall, on the principle of reciprocity, be exempt

from tax in the oiher Contracting State.

2, Paragraph 1 shall also apply in respect of participations

in a pool, a joint venture or in any other similar arrangement

regarding air transport.

3. For the purpose of paragraph 1, interest on funds directly

connected with the operation of aircraft shall be regaided tis

income from the operation of such aircraft.

4, For the purpose of this Article, the teim "tax"

••hall

mean income-taxes and any other taxes, dues and levies on

income which are imposed or may hereafter be imposed on

behalf of each Contracting State or of its political sub-divi-

sions or local authorities, irrespective of the manner in which

they :ue imposed.

Article 3

1. This Agreement shall be approved in accordance with

the laws and practice in force in each of the

Contracting

States. It shall enter into force on the date of the exchange

of letters certifying that the proper procedure was fulfilled in

each Contracting State. The exchange of letters shall Uke

place at Addis Ababa as soon a3 possible.

2. This Agreement shall have effect :

(a) In Ethiopia, in respect of income derived fiom the

operation of aircraft in international traffic after 1st

July, 1966.

(b Tn India, in respect of income derived from the opcia-

lion of aircraft in international traffic after 1st Julv,

1966.

Article 4

This Agreement shall continue in effect indefinitely but nay

be terminated by cither of the Contracting States with a

written notice of six months. In such event, the Agreement

shMl cease to be effective in respect of income derived from

operation of aircraft in international traffic after the 1st day

of January next following the date on which the said period

of six months expires.

Tn witpfss whereof the undersigned, duly authorised thereto,

have sijjr 1 tho present Agreement.

Douc in duplicate at New Delhi this 25th day of

Nov-

ember, one thousand nine hundred and seventy six in the

Amhnric, Fnglish and Hindi languages, all the texts being

equally Jiulhcntic, except that in the case of divergence of

interpretation the Fngli'h text shall previi¹.

Sd/-

(Pranab Kumar Mukheijee)

(BERHANE S. A. DhNEKE)

For the Government of the

For the Provisional Military

Republic of India;

Government of Socialist

Ethiopia ;

Excellency,

With, reference to the Agreement which is being signed

today between the Government of India and the Government

of Ethiopia for the avoidance of double taxation of income

of enterprises operating aircraft, T have the honour to slate

on behalf of the Government of India that whereas

the

said Agreement provides for the exemption from

tax in

either Contracting State of the income derived by an enter-

prise of the other Contracting State from operation of air

craft in international traffic after 1st July, 1966, the two

Contracting States have agreed as follows :

(1) Ethiopian Airlines being an enterprise

of Ethiopia,

any taxes paid by it or any deposits made by it towards its

tax dues in India in respect of its income for which it is

exempt from tax in accordance with the Agreement afore-

said shall be refunded by the Government of Tndia to Etho-

pian Airlines on an application in this behalf by Ethiopian

Airlines within six months from the date on which

the

Agreement aforesaid enters into force, and nny proceedings

already initiated for the taxation of such income shall

terminated,

(2) Air India being an enterprise of India, any taxes paid

by it or any deposits made by it towards its tax dues in

Ethiopia in respect of its income for

which it is exempt

from tax in accordance with the Agreement aforesaid shall

be refunded by the Government of Ethiopia to Air Jndia

on an application in this behalf by Air India within

six

months from the date on which

tho Agreement aforesaid

enters into force, and any proceedings already Initial od foi

the taxation of such income shall be terminated.

I shall be grateful if Your Excellency will confirm your

agreement with the position as stated above and, in such

case, this note and Your Excellency's reply thereto shall be

deemed to be part of the Agreement aforesaid.

Please accept, Excellency, the assurances of my higheyl

consideration,

SdA

PRANAB KUMAR MUKHERJEE

MR. BERHANE, S. A. DENEKE

Charge-d'Affaires,

of Socialist Ethiopia,

New Delhi.

Excellency,

I have tho honour to acknowledge receipt of your lettci

of today running as follows :

"With reference to the Agreement which is being signed

today between the Government of India and the Govern-

ment of Ethiopia for the avoidance of double taxation

income of enterprises operating aircraft, I have the honoui

to state on behalf of the Government of India that where-

as the said Agreement provides for the exemption from tax

in either Contracting State of the income derived by jn

enterprise of the other Contracting State from operation of

aircraft in international traffic after 1st July, 1966, the two

Contracting States have agreed as follows :

(1) Ethiopian Aiilines being an enterprise of

Ethiopia,

any taxes paid by it or any deposits made by it towards its

tnx dues in India in respect of its income for which it is

exempt from tax in accordance with the Agreement afore-

said shall be refunded

by the Government of India

Ethiopian

Airlines on an application in this behalf

Ethiopian Airlines within six months from the date on which

the Agreement aforesaid enters into force,

and any pro-

ceedings already initiated for the taxation of such income

shall be terminated.

(2) Air India being an enterprise of India, any taxes paid

by It or any deposits made by it towards its tax dues

Ethiopia in respect of its income

for which it is exempt

from tax in accordance with the Agreement aforesaid shall

be refunded by the Government of Ethiopia to Air India

on an application in this behalf by Air India within six

months from the date on which the Agreement aforesaid

enters into force, and any proceedings already initiated foi

the taxation of such income shall be terminated.

I shall be grateful if your Excellency will confirm your

agreement with the position as stated above and, in such case,

this note and your Excellency's reply thereto shall be deem-

ed to be part of the Agreement aforesaid."

2. 1 have the honour to confirm on behalf of the

Gov-

ernment of Ethiopia, the position as stated above. Your note

of today's date and my reply thereto shall, therefore, form

a part of the Agreement.

Accept, Excellency, the assurances of my highest consi-

deration.

Sd/-

BERHANE S. A DENRKE

SHRI PRANAB KUMAR MUKHERJEE

Minister of Revenue and Banking,

Government of India,

New Delhi.

[No, 2105/F. No. 145/15/71-FTD]

J. C. KALRA, Jt. Secy.

PRINTED BY THE MANAOEK, OOVT. OF INpiA PRESS, HINO ROAD, NEW DBLHI-110064

AND PUBLISHED BY THE CONTROLLER OF PUBLICATIONS, DELHl-110054,

1978