The quote addresses a situation where foreign investors from certain countries were able to sidestep their tax obligations in India by exploiting legal loopholes and international agreements. Specifically, it highlights that while Indian law mandates non-residents to pay taxes on income earned within the country's borders, many institutions based overseas managed to avoid these payments through a specific Double Taxation Treaty between India and Mauritius.
The deeper meaning of this statement points towards broader issues of tax evasion and the complexities inherent in international taxation laws. It suggests that multinational corporations and other financial entities often find ways to circumvent local regulations by taking advantage of discrepancies or ambiguities within treaties designed to prevent double taxation. This highlights a gap between legal intent and practical enforcement, suggesting potential areas for reform in international tax policies to ensure fairer distribution of tax burdens across borders.
Prashant Bhushan, the author of this quote, is an Indian lawyer known for his work on various high-profile legal cases involving financial fraud and corporate corruption. He has been a prominent voice advocating for transparency and accountability within India's economic framework, often focusing on issues related to money laundering, black money, and tax evasion by large corporations and foreign entities.
