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| Edited By: |Source: Reuters |Updated: Mar 17, 2018, 02:40 AM IST
Mauritius will revoke the licence of Mauritius-based entities that accept money sourced from India and then send it back to India as a way of circumventing Indian tax laws, Mauritius's finance minister said on Wednesday.
Indian regulators are looking into stemming such practices, which avoid Indian capital gains tax by routing money through Mauritius.
"Some concerns have been raised by India... we have agreed to look at these concerns as it is not in the interest of either country to continue to have these issues," Ramakrishna Sithanen told Reuters on the sidelines of a event in Mumbai.
Sithanen said the Mauritius Financial Services Commission (FSC), which is responsible for licensing global businesses, would revoke the licenses of entities investing in India if the funds were sourced from India.
"We have never received any complaint about money laundering. However there has been a request in the course of the investigation that is being carried out and we have submitted all the information that we have," Sithanen said.
He added that a balanced outcome was needed, which would allay the fears of India while not prejudicing legitimate business.
Late last year, India's central bank asked an arm of the Essar Group to clearly detail how it would use funds raised through a domestic bond issue, as it wanted to ensure the funds were not repatriated to India.
In its revised offer document, the company said most of the $920 million raised would be invested in its Mauritius-based unit, and would be used to invest in or acquire assets outside the Essar Group.
"All investments made... shall not be invested in India, directly or indirectly," the Essar unit offer document stated.
