The Supreme Court's decision in Union of India v. Azadi Bachao Andolan (2003), on the India-Mauritius…

In Union of India v. Azadi Bachao Andolan (2003) the Supreme Court upheld Circular No. 789 and refused to strike down the Convention for its susceptibility to treaty shopping, that is, a resident of a third country taking advantage of a treaty between two States. Transfer pricing, thin capitalisation and equalisation levy were not the issue. The position has since changed: under the Protocol signed on 10 May 2016, gains on shares acquired on or after 1 April 2017 are taxed on a source basis, and a Protocol signed on 7 March 2024, which entered into force on 10 August 2026 and was notified on 13 October 2026, adds a principal purpose test.