Legal Personality And The "Nat West" Ruling -The "AIG" Sequel

The concerns about the use of Mauritius as a favourable tax route for investment into India which were raised following the refusal by the Indian Authority for Advanced Rulings to rule that the route applied to the National Westminster Bank have been somewhat allayed, as a result of a recent Advanced Ruling on the Mauritius route.

The "Nat West" Ruling was made public earlier this year. "Nat West" Bank held shares in an Indian banking company, HDFC Bank, through two wholly-owned Mauritian subsidiaries. It was intended that the Mauritian subsidiaries would enjoy the reduction in Indian dividend withholding tax under the treaty from the full rate of 20% to 5% on all dividends paid to the Mauritian subsidiaries by the Indian company.