Agreement between the Government of the Republic of India and the Government of the Russian Federation for the avoidance of double taxation with respect to taxes on income

Sec. 1.

This Agreement shall apply to taxes on income imposed in each Contracting State.

Sec. 2.

The taxes to which this Agreement shall apply are in particular :

(a) in the case of the Russian Federation: (i) taxes on profits (income) of enterprises and organisations; and (ii) the income tax on individuals(hereinafter referred to as "Russian Tax");(b) in the case of India :income-tax, including any surcharge thereon (hereinafter referred to as "Indian Tax").

Sec. 3.

This Agreement shall apply also to any identical or substantially similar taxes on income which are imposed by either Contracting State after the date of signature of this Agreement in addition to, or in place of, the taxes referred to in paragraph 2. The competent authorities of the Contracting States shall notify each other of any substantial changes which are made in their respective taxation laws.

Article 3 General Definitions

Sec. 4.

Notwithstanding the provisions of paragraphs 1 and 2, where a person-other than an agent of an independent status to whom paragraph 5 applies is acting in a Contracting State on behalf of an enterprise of the other Contracting State, that enterprise shall be deemed to have a permanent establishment in the first-mentioned Contracting State in respect of any activities which that person undertakes for the enterprise. if-

(a) he has, and habitually exercises in that State, an authority to conclude contracts or carryon any business activities on behalf of the enterprise, unless his activities are limited to those specified in paragraph 3 of this Article; or(b) he habitually secures orders for the sale of goods or merchandise in that State exclusively or almost exclusively on behalf of the enterprise or other enterprise controlled by it or which have a controlling interest in it; or(c) he has no such authority, but habitually maintains in the first-mentioned State a stock of goods or merchandise from which he regularly delivers goods or merchandise on behalf of the enterprise; or(d) in acting as described in (b) above he manufactures or process in that State for the enterprise. goods or merchandise belonging to the enterprise.

Sec. 5.

An enterprise of a Contracting State shall not be deemed to have a permanent establishment in the other Contracting State merely because it carries on business in that other State through a broker, general commission agent or any other agent of an independent status, provided that such persons are acting in the ordinary course of their business. However, when the activities of such an agent are devoted wholly or almost wholly on behalf of that 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.

Sec. 6.

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 other Contracting State, or which carries on business in that other State (whether through a permanent establishment or otherwise), shall not of itself constitute either company a permanent establishment of the other.

Article 6 Income from Immovable Property

Sec. 7.

Where by reason of a special relationship between the payer and the beneficial owner of interest or between both of them and some other person, the amount of the interest, having regard to the debt-claim for which 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 only 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 the other provisions of this Agreement.

Article 12 Royalties and Fees for Technical Services