Mauritius has said there is no need to renegotiate its tax treaty with India for tracking black money as the existing provisions provide for exchange of banking and other tax-related information between the two countries to deal with the menace.

Indian government, on the other hand, is in favour of revising the agreement to prevent generation of illicit money and stop re-routing of funds through Mauritius. It suspects that the Mauritius route is not only being used by companies to evade tax but also to ?rountrip? investment, meaning that funds generated in India are reinvested back to the country after routing them through Mauritius.

Replying to FE queries, the Mauritian finance ministry said, ?The tracking of black money requires other forms of collaboration between the authorities of our two countries, which are already in place, and which no additional provision in the DTA (tax treaty) can cater for.?

It further said that over the last three years, Mauritius had received around 64 requests for bank information from India and the requested information was duly submitted.

Concerns have been raised in the recent past over suspicion of round-tripping or routing of illicit money from India back into the country through Mauritius. However, Mauritius said it had not received any official report of a round-tripping offence from the Indian authorities. ?We have always told the Indian authorities that we can only act if any breach (of round-tripping) is communicated to us,? it said.

The Indian government is facing intense pressure from the civil society activists, Opposition parties and also from the Supreme Court over the issue of black money stashed away by some Indians in tax havens. India has revised Double Taxation Avoidance Agreements (DTAAs) with 40 nations so that banking and other tax-related information can be shared with these countries.

Recently, India and Mauritius agreed to review the operations of the Joint Working Group (JWG), which was set up in 2006 to strengthen the mechanism for exchange of information under the India-Mauritius tax treaty, besides putting in place adequate safeguards to prevent misuse of the DTAA between them, which is in effect from 1983.

In addition to its original role, the JWG can, for example, also work on developing the Mauritius International Financial Centre so as to capitalise on the investment opportunities that exist in the region and Africa,? the Mauritian finance ministry said.

The island nation said it was already collaborating with India to track black money and the partnership had strengthened over the years. Mauritius said its existing treaty with India provided for sharing of banking information and its banks and other financial institutions were required to maintain “full and true written record of every transaction they conduct?.

Banks and other financial institutions are required to maintain the identity information of their clients, which must be kept for at least seven years, and “numbered bank accounts are not allowed in Mauritius,? it said. Any violation of these obligations could attract a fine of 50,000 Mauritian rupees (about R80,000) and up to two years of imprisonment. Besides, Mauritius Financial Services Commission has signed an MoU with the Securities and Exchange Board of India for exchange of information.