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AGREEMENT

BETWEEN THE GOVERNMENT OF THE REPUBLIC OF INDIA AND THE GOVERNMENT OF THE

KYRGYZ REPUBLIC FOR THE AVOIDANCE OF DOUBLE TAXATION AND FOR THE PREVENTION OF

FISCAL EVASION WITH RESPECT TO TAXES ON INCOME.Notification

No. G. S. R. 75(E), dated 7th February 2001.Whereas

the annexed Agreement between the Government of the Republic of India and the

Government of the Kyrgyz Republic for the avoidance of double taxation and for

the prevention of fiscal evasion with respect to taxes on income has come into

force on the 10th day of January, 2001, thirty days after the date of receipt

of the latter of the notification by the Contracting States to each other of

the completion of the procedure required by their respective laws for the entry

into force of this Agreement in accordance with article 29 of the said

agreement:Now,

therefore, in exercise of the powers conferred by section 90 of the Income-tax

Act, 1961 (43 of 1961), the Central Government hereby directs that all the

provisions of the said Agreement shall be given effect to in the Union of

India.ANNEXUREAGREEMENT

BETWEEN THE GOVERNMENT OF THE REPUBLIC OF INDIA AND THE GOVERNMENT OF THE

KYRGYZ REPUBLIC FOR THE AVOIDANCE OF DOUBLE TAXATION AND FOR THE PREVENTION OF

FISCAL EVASION WITH RESPECT TO TAXES ON INCOME.The

Government of the Republic of India and the Government of the Kyrgyz Republic,

desiring to conclude an Agreement for the avoidance of double taxation and the

prevention of fiscal evasion with respect to taxes on income and with a view to

promoting economic co-operation between the two countries have agreed as

follows:Article

1PERSONAL

SCOPEThis

Agreement shall apply to persons who are residents of one or both of the

Contracting States.Article2

TAXES COVERED1. This Agreement shall

apply to taxes on income imposed on behalf of a Contracting State irrespective

of the manner in which they are levied.2. There shall be

regarded as taxes on income all taxes imposed on total income, or on elements

of income, including taxes on gains from the alienation of movable or immovable

property and taxes on the total amounts of wages or salaries paid by

enterprises.3. The existing taxes to

which the agreement shall apply are in particular:a. in India:the

income-tax, including any surcharge thereon;(hereinafter

referred to as "Indian tax").a.b. in Kyrgyzstan:i.

tax

on profits and income of legal persons;ii.

income-tax

on physical persons;(hereinafter

referred to as "Kyrgyz tax").1.2.3.4. The Agreement shall

apply also to any identical or substantially similar taxes which are imposed

after the date of signature of the Agreement in addition to, or in place of,

the existing taxes referred to in paragraph 3. The competent authorities of the

Contracting States shall notify each other of any significant changes which

have been made in their respective taxation laws.Article

3 GENERAL DEFINITIONS1. For the purposes of

this Agreement, unless the context otherwise requires:a. the term

"India" means the territory of India and includes the territorial sea

and airspace above it, as well as any other maritime zone in which India has

sovereign rights, other rights and jurisdiction, according to the Indian law

and in accordance with international law, including the U. N. Convention on the

law of the sea;b. the term

"Kyrgyzstan" means the Kyrgyz Republic. When used in the geographical

terms the term "Kyrgyzstan" means the territory on which the Kyrgyz

Republic exercises sovereign rights and jurisdiction in accordance with Kyrgyz

law and in accordance with international law.c. the term

"person" includes an individual, a company, a body of persons and any

other entity which is treated as a taxable unit under the taxation laws in

force in the respective Contracting States;d. the term

"company" means any corporate entity which is treated as a body

corporate for tax purposes and includes in particular joint stock companies,

limited companies or any other enterprise treated as company under Kyrgyz law;e. the terms

"enterprise of a Contracting State" and "enterprise of the other

Contracting State" mean respectively an enterprise carried on by a

resident of a Contracting State and an enterprise carried on by a resident of

the other Contracting State;f. the term

"international traffic" means any transport by an aircraft operated

by an enterprise which is a resident of a Contracting State, except when the

aircraft is operated solely between places in the other Contracting State;g. the term

"competent authority" means:i.

India, the Central Government in the Ministry of Finance (Department of

Revenue) or their authorised representative;ii.

Kyrgyz Republic, the Ministry of Finance or their authorised representative;a.b.c.d.e.f.g.h. the term

"national" means:i.

any

individual possessing the nationality of a Contracting State;ii.

any

legal person, partnership or association deriving its status as such from the

laws in force in a Contracting State;a.b.c.d.e.f.g.h.i. the term "fiscal

year" means:i.

the case of India, the financial year beginning on the first day of April;ii.

the case of Kyrgyzstan, the calendar year;a.b.c.d.e.f.g.h.i.j. the term

"tax" means Indian tax or Kyrgyz tax, as the context requires, but

shall not include any amount which is payable in respect of any default or

omission in relation to the taxes to which this Agreement applies or which

represents a penalty or fine imposed relating to those taxes;k. the terms "a

Contracting State" and "the other Contracting State" mean the

Republic of India or the Kyrgyz Republic as the context requires.2. As regards the

application of the Agreement by a Contracting State any term not defined

therein shall, unless the context otherwise requires, have the meaning which it

has under the law of that State concerning the taxes to which the Agreement

applies.Article

4RESIDENT1. For the purposes of

this Agreement, the term "resident of a Contracting State" means any

person who, under the laws of that State, is liable to tax therein by reason of

his domicile, residence, place of management, or any other criterion of a

similar nature, But this term does not include any person who is liable to tax

in that State in respect only of income from sources in-that State.2. Where by reason of

the provisions of paragraph 1 an individual is a resident of both Contracting

States, then his status shall be determined as follows:a. he shall be deemed to

be a resident of the State in which he has a permanent home available to him;

if he has a permanent home available to him in both States, he shall be deemed

to be a resident of the State with which his personal and economic relations

are closer (centre of vital interests);b. If the State in which

he has his centre of vital interests cannot be determined, or if he has not a

permanent home available to him in either State, he shall be deemed to be a

resident of the State in which he has an habitual abode;c. If he has an habitual

abode in both States or in neither of them, he shall be deemed to be a resident

of the State of which he is a national;d. If he is a national

of both States or of neither of them, the competent authorities of the

Contracting States shall settle the question by mutual agreement.1.2.3. Where by reason of

the provisions of paragraph 1 a person other than an individual is a resident

of both Contracting States, then it shall be deemed to be a resident of the

State in which its place of effective management is situated. If the State in

which its place of effective management is situated cannot be determined, then

the competent authorities of the Contracting States shall settle the question

by mutual agreement.Article

5PERMANENT

ESTABLISHMENT1. For the purposes of

this Agreement the term "permanent establishment" means a fixed place

of business through which the business of an enterprise is wholly or partly

carried on.2. The term

"permanent establishment" includes especially:a. a place of

management;b. a branch;c. an office;d. a factory;e. a workshop;f. a mine, an oil or gas

well, a quarry or any other place of extraction of natural resources;g. a sales outlet;h. a warehouse in

relation to a person providing storage facilities for others; andi. a farm, plantation or

other place where agricultural, forestry, plantation or related activities are

carried on.1.2.3. A building site, a

construction, assembly or installation project, or supervisory activities

connected therewith only if such site, or project or activity lasts for more

than six months.4. An enterprise shall

be deemed to have a permanent establishment in a Contracting State and to carry

on business through that permanent establishment if it provides services or

facilities in connection with, or supplies plant and machinery on hire used for

or to be used in the prospecting for, or extraction or exploitation of mineral

oils in that State.5. Notwithstanding the

preceding provisions of this article, the term "permanent

establishment" shall be deemed not to include:a. the use of facilities

solely for the purpose of storage, display or delivery of goods or merchandise

belonging to the enterprise;b. the maintenance of a

stock of goods or merchandise belonging to the enterprise solely for the

purpose of storage, display or delivery;c. the maintenance of a

stock of goods or merchandise belonging to the enterprise solely for the

purpose of processing by another enterprise;d. the maintenance of a

fixed place of business solely for the purpose of purchasing goods or

merchandise or of collecting information, for the enterprise;e. the maintenance of a

fixed place of business solely for the purpose of carrying on, for the

enterprise, any other activity of a preparatory or auxiliary character; orf. the maintenance of a

fixed place of business solely for any combination of activities mentioned in

sub-paragraphs (a) to (e), provided that the overall activity of the fixed

place of business resulting from this combination is of a preparatory or

auxiliary character.1.2.3.4.5.6. Notwithstanding the

provisions of paragraphs 1 and 2, where a person---other than an agent of an

independent status to whom paragraph 8 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 such a person:a. has and habitually

exercises, in that State an authority to conclude contracts in the name of the

enterprise, unless the activities of such person are limited to those mentioned

in paragraph 5 which, if exercised through a fixed place of business, would not

make this fixed place of business a permanent establishment under the

provisions of that paragraph orb. 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; orc. habitually secures

orders in the first-mentioned State, wholly or almost wholly for the enterprise

itself or for the enterprise and other enterprises controlling, controlled by,

or subject to the same control, as that enterprise.1.2.3.4.5.6.7. Notwithstanding the

preceding provisions of this article, an insurance enterprise of a Contracting

State shall, except in regard to re-insurance, be deemed to have a permanent

establishment in the other Contracting State if it collects premiums in the

territory of that other State or insures risks situated therein through a

person other than an agent of an independent status to whom paragraph 8

applies.8. An enterprise shall

not be deemed to have a permanent establishment in a 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, he will not be considered an agent of an independent status

within the meaning of this paragraph.9. 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

6INCOME

FROM IMMOVABLE PROPERTY1. Income derived by a

resident of a Contracting State from immovable property (including income from

agriculture or forestry) situated in the other Contracting State may be taxed

in that other State.2. The term

"immovable property" shall have the meaning which it has under the

law of the Contracting State in which the property in question is situated. The

term shall in any case include property accessory to immovable property,

livestock and equipment used in agriculture and forestry, rights to which the

provisions of general law respecting landed property apply, usufruct of

immovable property and rights to variable or fixed payments as consideration

for the working of, or the right to work, mineral deposits, sources and other

natural resources; ships, boats and aircraft or road and railway vehicles shall

not be regarded as immovable property.3. The provisions of

paragraph 1 shall apply to income derived from the direct use, letting, or use

in any other form of immovable property.4. The provisions of

paragraphs 1 and 3 shall also apply to the income from immovable property of an

enterprise and to income from immovable property used for the performance of

independent personal services.5. Where the ownership

of shares or other corporate rights in a company entitles the owner of such

shares or corporate rights to the enjoyment of immovable property held by the

company, the income from direct use, letting, or use in any other form of such

right to enjoyment may be taxed in the Contracting State, in which the

immovable property is situated.Article

7BUSINESS

PROFITS1. The profits of an

enterprise of a Contracting State shall be taxable only in that State unless

the enterprise carries on business in the other Contracting State through a

permanent establishment situated therein. If the enterprise carries on business

as aforesaid, the profits of the enterprise may also be taxed in the other

State but only so much of them as is attributable to that permanent

establishment.2. Subject to the

provisions of paragraph 3, where an enterprise of a Contracting State carries

on business in the other Contracting State through a permanent establishment

situated therein, there shall in each Contracting State be attributed to that

permanent establishment the profits which it might be expected to make if it

were a distinct and separate enterprise engaged in the same or similar

activities under the same or similar conditions and dealing wholly

independently with the enterprise of which it is a permanent establishment.3. In determining the

profits of a permanent establishment, there shall be allowed as deductions

expenses which are incurred for the purposes of the business of the permanent

establishment, including executive and general administrative expenses so

incurred, whether in the State in which the permanent establishment is situated

or elsewhere, in accordance with the provisions of and subject to the

limitations of the tax laws of that State.4. No profits shall be

attributed to a permanent establishment by reason of the mere purchase by that

permanent establishment of goods or merchandise for the enterprise.5. For the purposes of

the preceding paragraphs, the profits to be attributed to the permanent

establishment shall be determined by the same method year by year, unless there

is good and sufficient reason to the contrary.6. Where profits include

items of income which are dealt with separately in other articles of this

Agreement, then the provisions of those articles shall not be affected by the

provisions of this article.Article

8INTERNATIONAL

TRAFFIC1. Profits derived by an

enterprise of a Contracting State from the operation of aircraft in

international traffic shall be taxable only in that Contracting State.2. Profits derived by a

transportation enterprise which is a resident of a Contracting State from the

use, maintenance, or rental of containers (including trailers and other

equipment for the transport of containers) used for the transport of goods or

merchandise in international traffic shall be taxable only in that Contracting

State unless the containers are used solely within the other Contracting State.3. For the purposes of

this article, interest on funds connected with the operation of aircrafts in

international traffic shall be regarded as profits derived from the operation

of such aircraft, and the provisions of article 11 shall not apply in relation

to such interest.4. The provisions of

paragraph 1 shall also apply to profits from the participation in a pool, a

joint business or an international operating agency.Article

9ASSOCIATED

ENTERPRISES1. Where:a. an enterprise of a

Contracting State participates directly or indirectly in the management,

control or capital of an enterprise of the other Contracting State; orb. the same persons

participate directly or indirectly in the management, control or capital of an

enterprise of a Contracting State and an enterprise of the other Contracting

State,and

in either case conditions are made or imposed between the two enterprises in

their commercial or financial relations which differ from those which would be

made between independent enterprises, then any profits which would, but for

those conditions, have not so accrued, may be included in the profits of that

enterprise and taxed accordingly.1.2. Where a Contracting

State includes in the profits of an enterprise of that State---and taxes

accordingly---profits on which an enterprise of the other Contracting State has

been charged to tax in that other State and the profits so included are profits

which would have accrued to the enterprise of the first mentioned State if the

conditions made between the two enterprises had been those which would have

been made between independent enterprises, then that other State shall make an

appropriate adjustment to the amount of the tax charged therein on those

profits. In determining such adjustment, due regard shall be had to the other

provisions of this Agreement and the competent authorities of the Contracting

States shall, if necessary, consult each other.Article

10DIVIDENDS1. Dividends paid by a

company which is a resident of a Contracting State to a resident of the other

Contracting State may be taxed in that other State.2. However, such

dividends may also be taxed in the Contracting State of which the company

paying the dividends is a resident and according to the laws of that State, but

if the recipient is the beneficial owner of the dividends the tax so charged

shall not exceed 10 per cent. of the gross amount of the dividends. This

paragraph shall not affect the taxation of the company in respect of the

profits out of which the dividends are paid.3. The term

"dividends" as used in this article means income from shares or other

rights, not being debt-claims, participating in profits, as well as income from

other corporate rights which is subjected to the same taxation treatment as

income from shares by the laws of the State of which the company making the

distribution is a resident.4. The provisions of

paragraphs 1 and 2 shall not apply if the beneficial owner of the dividends,

being a resident of a Contracting State, carries on business in the other

Contracting State of which the company paying the dividends is a resident,

through. a permanent establishment situated therein, or performs in that other

State independent personal services from a fixed base situated therein, and the

holding in respect of which the dividends are paid is effectively connected

with such permanent establishment or fixed base. In such case the provisions of

article 7 or article 14, as the case may be, shall apply.5. Where a company which

is a resident of a Contracting State derives profits or income from the other

Contracting State, that other State may not impose any tax on the dividends

paid by the company, except in so far as such dividends are paid to a resident

of that other State or in so far as the holding in respect of which the

dividends are paid is effectively connected with a permanent establishment or a

fixed base situated in that other State, nor subject the company's

undistributed profits to a tax on the company's undistributed profits, even if

the dividends paid or the undistributed profits consist wholly or partly of

profits or income arising in such other State.Article

11INTEREST1. Interest arising in a

Contracting State and paid to a resident of the other Contracting State may be

taxed in that other State.2. However, such

interest may also be taxed in the Contracting State in which it arises, and

according to the laws of that State, but if the recipient is the beneficial

owner of the interest the tax so charged shall not exceed 10 per cent. of the

gross amount of the interest.3. Notwithstanding the

provisions of paragraph 2, interest arising in a Contracting State shall be

exempt from tax in that State provided it is derived and beneficially owned by

---i.

the

Government of the other Contracting State; orii.

the

Central Bank of the other Contracting State or governmental financial

institutions that may be mutually agreed upon between the two Contracting

States.1. The term

"interest" as used in this article means income from debt claims of

every kind, whether or not secured by mortgage and whether or not carrying a

right to participate in the debtor's profits, and in particular, income from

Government securities and income from bonds or debentures, including premiums

and prizes attaching to such securities, bonds or debentures. Penalty charges

for late payment shall not be regarded as interest for the purpose of this

article.2. The provisions of

paragraphs 1 and 2 shall not apply if the beneficial owner of the interest,

being a resident of a Contracting State, carries on business in the other

Contracting State in which the interest arises, through a permanent

establishment situated therein, or performs in that other State independent

personal services from a fixed base situated therein, and the debt-claim in respect

of which the interest is paid is effectively connected with such permanent

establishment or fixed base. In such case, the provisions of article 7 or

article 14, as the case may be, shall apply.3. Interest shall be

deemed to arise in a Contracting State when the payer is that State itself or a

resident of that State. Where, however, the person paying the interest, whether

he is a resident of a Contracting State or not, has in a Contracting State a

permanent establishment or a fixed base in connection with which the

indebtedness on which the interest is paid was incurred, and such interest is

borne by such permanent establishment or fixed base, then such interest shall

be deemed to arise in the State in which the permanent establishment or fixed

base is situated.4. Where, by reason of a

special relationship between the payer and the beneficial owner 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 a 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

12ROYALTIES

AND FEES FOR TECHNICAL SERVICES1. Royalties or fees for

technical services arising in a Contracting State and paid to a resident of the

other Contracting State may be taxed in that other State.2. However, such

royalties or fees for technical services may also be taxed in the Contracting

State in which they arise, and according to the laws of that State, but if the

recipient is the beneficial owner of the royalties or fees for technical

services, the tax so charged shall not exceed 15 per cent. Of the gross amount

of the royalties or fees for technical services.3.a. The term

"royalties" as used in this article means payments of any kind

received as a consideration for;i.

the

use of, or the right to use, any copyright of literary, artistic or scientific

work including software, cinematograph and video films or records or tapes for

television or radio;ii.

any

patent, design or model, plan, secret formula or process, trade mark or for

information (know-how) concerning industrial, commercial, or scientific

experience; oriii.

the

use of, or right to use, any industrial, commercial or scientific equipment.a.b. The term "fees

for technical services" as used in this article, means payment of any kind

in consideration for the rendering of any managerial, technical or consultancy

services including the provision of services by technical or other personnel

but does not include payments for services mentioned in articles 14 and 15 of

this Agreement.1.2.3.4. The provisions of

paragraphs 1 and 2 shall not apply if the beneficial owner of the royalties or

fees for technical services being a resident of a Contracting State, carries on

business in the other Contracting State, in which the royalties or fees for

technical services arise, through a permanent establishment situated therein,

or performs in that other State independent personal services from a fixed base

situated therein, and the right or property in respect of which the royalties

or fees for technical services are paid is effectively connected with such

permanent establishment or fixed base. In such a case the provisions of article

7 or article 14, as the case may be, shall apply.5. Royalties or fees for

technical services shall be deemed to arise in a Contracting State when the

payer is that State itself, or a resident of that State. Where, however, the

person paying the royalties or fees for technical services, whether he is a

resident of a Contracting State or not, has in a Contracting State a permanent

establishment or a fixed base in connection with which the liability to pay the

royalties or fees for technical services was incurred, and such royalties or

fees for technical services are borne by such permanent establishment, or fixed

base, then such royalties or fees for technical services shall be deemed to

arise in the State in which the permanent establishment or fixed base is

situated.6. Where, by reason of a

special relationship between the payer and the beneficial owner or between both

of them and some other person, the amount of the royalties or fees for

technical services, having regard to the use, right or information for which

they are 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

13CAPITAL

GAINSa. Gains derived by a

resident of a Contracting State from the alienation of immovable property

referred to in article 6 and situated in the other Contracting State may also

be taxed in that other State.b. Gains from the

alienation of movable property forming part of the business property of a

permanent establishment which an enterprise of a Contracting State has in the

other Contracting State or of movable property pertaining to a fixed base

available to a resident of a Contracting State in the other Contracting State

for the purpose of performing independent personal services, including such

gains from the alienation of such a permanent establishment (alone or with the

whole enterprise) or of such fixed base, may be taxed in that other State.c. Gains derived by a

resident of a Contracting State from the alienation of aircraft operated in

international traffic or movable property pertaining to the operation of such

aircraft, shall be taxable only in the Contracting State in which the

enterprise is a resident.d. Gains from the

alienation of shares of the capital stock of a company the property of which

consists directly or indirectly principally of immovable property situated in a

Contracting State may be taxed in that State.e. Gains from the

alienation of shares other than those mentioned in paragraph 4 of a company

which is a resident of a Contracting State may be taxed in that State.f. Gains from the

alienation of any property other than that referred to in paragraphs 1, 2, 3, 4

and 5, shall be taxable only in the Contracting State of which the alienator is

a resident.Article

14INDEPENDENT

PERSONAL SERVICES1. Income derived by a

resident of a Contracting State in respect of professional services or other

activities of an independent character shall be taxable only in that State

except in the following circumstances, when such income may also be taxed in

the other Contracting State:a. if he has a fixed

base regularly available to him in the other Contracting State for the purpose

of performing his activities; in that case, only so much of the income as is

attributable to that fixed base may be taxed in that other Contracting State orb. if his stay in the

other State is for a period or periods aggregating 183 days or more in any

12-month period commencing or ending in the fiscal year concerned; in that

case, only so much of the income as is derived from his activities performed in

that other State may be taxed in that other State.1.2. The term

"professional services" includes especially, independent scientific,

literary, artistic, educational or teaching activities as well as the

independent activities of physicians, lawyers, engineers, architects, dentists

and accountants.Article

15DEPENDENT

PERSONAL SERVICES1. Subject to the

provisions of articles 16, 18 and 19, salaries, wages, and other similar

remuneration derived by an individual who is a resident of a Contracting State

in respect of an employment shall be taxable only in that State unless the employment

is exercised in the other Contracting State. If the employment is so exercised,

such remuneration as is derived therefrom may be taxed in that other State.2. Notwithstanding the

provisions of paragraph 1, remuneration derived by a resident of a Contracting

State in respect of an employment exercised in the other Contracting State

shall be taxable only in the first-mentioned State if:a. the recipient is

present in the other State for a period or periods not exceeding in the

aggregate 183 days in any 12-month period commencing or ending in the fiscal

year concerned; andb. the remuneration, is

paid by, or on behalf of, an employer who is not a resident of the other State;

andc. the remuneration is

not borne by a permanent establishment or a fixed base which the employer has

in the other State.1.2.3. Notwithstanding the

preceding provisions of this article, remuneration derived in respect of an

employment exercised aboard an aircraft operated in international traffic, by

an enterprise which is a resident of a Contracting State may be taxed in that

State.Article

16DIRECTORS'

FEESDirectors'

fees and other similar payments derived by a resident of a Contracting State in

his capacity as a member of the board of directors of a company which is a

resident of the other Contracting State may be taxed in that other State.Article

17ARTISTES

AND SPORTS PERSONS1. Notwithstanding the

provisions of articles 14 and 15, the income derived by a resident of a

Contracting State as an entertainer, such as a theatre, motion picture, radio

or television artiste, or a musician, or as a sportsperson, from his personal

activities as such exercised in the other Contracting State, may be taxed in

that other State.2. Where income in

respect of personal activities exercised by an entertainer or a sportsperson in

his capacity as such accrues not to the entertainer or sportsperson himself but

to another person, that income may, notwithstanding the provisions of articles

7, 14 and 15, be taxed in the Contracting State in which the activities of the

entertainer or sportsperson are exercised.3. The provisions of

paragraphs 1 and 2, shall not apply to income from activities performed in a

Contracting State by entertainers or sportspersons if the visit to that State

is substantially supported by public funds of one or both of the Contracting

States or the activity is exercised within the framework of cultural or sports

co-operation agreement between the Contracting States. In such a case, the

income is taxable only in the Contracting State of which the entertainer or

sportsperson is a resident.Article

18PENSIONS

AND OTHER PAYMENTS1. Subject to the

provisions of paragraph 2 of article 19, pensions and other similar

remuneration and annuities paid to a resident of a Contracting State shall be

taxable only in that State.2. The term

"annuity" means a stated sum payable periodically at stated times

during life or during a specified or ascertainable period of time under an

obligation to make the payments in return for adequate and full consideration

in money or money's worth.Article

19GOVERNMENT

SERVICE1.a. Remuneration, other

than a pension, paid by a Contracting State or a political sub-division or a

local authority thereof to an individual in respect of services rendered to

that State or sub-division or authority shall be taxable only in that State.b. However, such

remuneration shall be taxable only in the other Contracting State if the

services are rendered in that other State and the individual is a resident of

that other State who:i.

a national of that State; orii.

did

not become a resident of that State solely for the purpose of rendering the

services.1.2.a. Any pension paid by,

or out of funds created by, a Contracting State or a political sub-division or

a local authority thereof to an individual in respect of services rendered to

that State or sub-division or authority shall be taxable only in that State.b. However, such pension

shall be taxable only in the other Contracting State if the individual is a

resident of, and a national of, that State.1.2.3. The provisions of

articles 15, 16 and 18 shall apply to remuneration and pensions in respect of

services rendered in connection with a business carried on by a Contracting

State or a political sub-division or a local authority thereof.Article

20STUDENTS1. A student or business

apprentice who is or was a resident of a Contracting State immediately before

visiting the other Contracting State and who is present in that other

Contracting State solely for the purpose of his education or training shall be

exempt from tax in that other State on:a. payments made to him

by persons residing outside that other State for the purposes of his

maintenance, education or training; andb. remuneration from

employment in that other State for an amount not exceeding the amount which is

exempt from tax under the laws of that other Contracting State for any fiscal

year, as the case may be, provided that such employment is directly related to

his studies or is undertaken for the purpose of his maintenance.1.2. The benefit of this

article shall extend only for such period of time as may be reasonably or

customarily required to complete the education or training undertaken, but in

no event shall any individual have the benefits of this article for more than

five consecutive years from the date of his first arrival in that other

Contracting State.Article

21PROFESSORS,

TEACHERS AND RESEARCH SCHOLARS1. A professor or

teacher who is or was a resident of the Contracting State immediately before

visiting the other Contracting State for the purpose of teaching or engaging in

research, or both, at a university, college, school or other approved

institution in that other Contracting State shall be exempt from tax in that

other State on any remuneration for such teaching or research for a period not

exceeding two years from the date of his arrival in that other State.2. This article shall

not apply to income from research, if such research is undertaken primarily for

the private benefit of a specific person or persons.3. For the purposes of

this article and article 20, an individual shall be deemed to be a resident of

a Contracting State if he is resident in that State in the fiscal year in which

he visits the other Contracting State or in the immediately preceding fiscal

year.4. For the purposes of

paragraph 1:a. the teaching or

research assignment should be approved by the Governments of the Contracting

States.b. "approved

institutions" means an institution which has been approved in this regard

by the Government of the concerned State.Article

22OTHER

INCOME1. Items of income of a

resident of a Contracting State, wherever arising, not dealt with in the

foregoing articles of this Agreement shall be taxable only in that State.2. The provisions of

paragraph 1 shall not apply to income, other than income from immovable

property as defined in paragraph 2 of article 6, if the recipient of such

income, being a resident of a Contracting State, carries on business in the

other Contracting State through a permanent establishment situated therein, or

performs in that other State independent personal services from a fixed base

situated therein, and the right or property in respect of which the income is

paid is effectively connected with such permanent establishment or fixed base.

In such case the provisions of article 7 or article 14, as the case may be,

shall apply.3. Notwithstanding the

provisions of paragraph 1, if a resident of a Contracting State derives income

from sources within the other Contracting State in the form of lotteries,

crossword puzzles, races including horse races, card games and other games or

any sort of gambling or betting of any form or nature whatsoever, such income

may be taxed in the other Contracting State.Article

23METHOD

FOR ELIMINATION OF DOUBLE TAXATION1. Where a resident of a

Contracting State derives income which, in accordance with the provisions of

this Agreement, may be taxed in the other Contracting State, the

first-mentioned State shall allow as a deduction from the tax on the income of

that resident, an amount equal to the income-tax paid in that other State. Such

deduction shall not, however, exceed that part of the income-tax as computed

before the deduction is given, which is attributable to the income which may be

taxed in that other State.2. In the case of India,

the tax payable in the Contracting State mentioned in paragraph 1 of this

article shall be deemed to include the tax which would have been payable but

for the tax incentives granted under the laws of the Contracting State and

which are designed to promote economic development.3. Where in accordance

with any provision of the Agreement income derived by a resident of a

Contracting State is exempt from tax in that State, such State may

nevertheless, in calculating the amount of tax on the remaining income of such

resident, take into account the exempted income.Article

24NON-DISCRIMINATION1. Nationals of a

Contracting State shall not be subjected in the other Contracting State to any

taxation or any requirement connected therewith, which is other or more

burdensome than the taxation and connected requirements to which nationals of

that other State in the same circumstances in particular with respect to

residence, are or may be subjected. This provision shall, notwithstanding the

provisions of article 1, also apply to persons who are not residents of one or

both of the Contracting States.2. The taxation on a

permanent establishment which an enterprise of a Contracting State has in the

other Contracting State shall not be less favourably levied in that other State

than the taxation levied on enterprises of that other State carrying on the

same activities. This provision shall not be construed as preventing a

Contracting State from charging the profits of a permanent establishment which

a company of the other Contracting State has in the first-mentioned State at a

rate of tax which is higher than that imposed on the profits of a similar

company of the first-mentioned Contracting State, nor as being in conflict with

the provisions of paragraph 3 of article 7 of this Agreement. This provision

shall not be construed as obliging a Contracting State to grant to residents of

the other Contracting State any personal allowances, reliefs and reductions for

taxation purposes on account of civil status or family responsibilities which

it grants to its own residents.3. Enterprises of a

Contracting State, the capital of which is wholly or partly owned or

controlled, directly or indirectly, by one or more residents of the other

Contracting State, shall not be subjected in the first-mentioned State to any

taxation or any requirement connected therewith which is other or more

burdensome than the taxation and connected requirements to which other similar

enterprises of the first-mentioned State are or may be subjected.4. Except where the

provisions of paragraph 1 of article 9, paragraph 7 of article 11, or paragraph

6 of article 12 apply, interest, royalties and other disbursements paid by an

enterprise of a Contracting State to a resident of the other Contracting State

shall, for the purpose of determining the taxable profits of such enterprise,

be deductible under the same conditions as if they had been paid to a resident

of the first-mentioned State.Article

25MUTUAL

AGREEMENT PROCEDURE1. Where a person

considers that the actions of one or both of the Contracting States result or

will result for him in taxation not in accordance with the provisions of this

Agreement, he may, irrespective of the remedies provided by the domestic law of

those States, present his case to the competent authority of the Contracting

State of which he is a resident or, if he comes under paragraph 1 of article

24, to that of the Contracting State of which he is a national. The case must

be presented within three years from the first notification of the action

resulting in taxation not in accordance with the provisions of the Agreement.2. The competent

authority shall endeavour, if the objection appears to it to be justified and

if it is not itself able to arrive at a satisfactory solution, to resolve the

case by mutual agreement with the competent authority of the other Contracting

State, with a view to the avoidance of taxation which is not in accordance with

this Agreement. Any agreement reached shall be implemented notwithstanding any

time limits in the domestic law of the Contracting States.3. The competent

authorities of the Contracting States shall endeavour to resolve by mutual

agreement any difficulties or doubts arising as to the interpretation or

application of the Agreement. They shall also consult each other for the

elimination of double taxation in cases not provided for in the Agreement.4. The competent

authorities of the Contracting States may communicate with each other directly,

including through a joint commission consisting of themselves or their

representatives, for the purpose of reaching an agreement in the sense of the

preceding paragraphs.Article

26EXCHANGE

OF INFORMATION1. The competent

authorities of the Contracting States shall exchange such information

(including certified copies of documents), as is necessary for carrying out the

provisions of this Agreement or of the domestic laws of the Contracting States

concerning taxes covered by the Agreement, in so far as the taxation thereunder

is not contrary to the Agreement. The exchange of information is not restricted

by article 1. Any information received by the competent authority of a

Contracting State shall be treated as secret in the same manner as information

obtained under the domestic laws of that State and shall be disclosed only to

persons or authorities (including courts and administrative bodies) involved in

the assessment or collection of, the enforcement or prosecution in respect of,

or the determination of appeals in relation to, the taxes to which the

Agreement applies and shall be used only for such purposes. They may disclose

the information in public court proceedings or in judicial decisions.2. In no case shall the

provisions of paragraph 1 be construed so as to impose on the competent

authority of a Contracting State the obligation:a. to carry out

administrative measures at variance with the laws or administrative practice of

that or of the other Contracting State;b. to supply information

(including certified copies of documents) which is not. obtainable under the

laws or in the normal course of the administration of that or of the other

Contracting State;c. to supply information

which would disclose any trade, business, industrial, commercial or

professional secret or trade process, or information, the disclosure of which

would be contrary to public policy.Article

27COLLECTION

ASSISTANCE1. The Contracting

States undertake to lend assistance to each other in the collection of taxes to

which this Agreement relates, together with interest, costs, and civil

penalties relating to such taxes, referred to in this article as a

"revenue claim".2. Request for

assistance by the competent authority of a Contracting State in the collection

of a revenue claim shall include a certification by such authority that, under

the laws of that State, the revenue claim has been finally determined. For the

purposes of this article, a revenue claim is finally determined when a

Contracting State has the right under its internal law to collect the revenue

claim and the taxpayer has no further rights to restrain collection.3. Amounts collected by

the competent authority of a Contracting State pursuant to this article shall

be forwarded to the competent authority of the other Contracting State.

However, the first-mentioned Contracting State shall be entitled to

reimbursement of costs, if any, incurred in the course of rendering such

assistance to the extent mutually agreed between the competent authorities of

the two States.4. Nothing in this

article shall be construed as imposing on either Contracting State the

obligation to carry out administrative measures of a different nature from

those used in the collection of its own taxes or those which would be contrary

to its public policy.Article

28DIPLOMATIC

AND CONSULAR OFFICIALSNothing

in this Agreement shall affect the fiscal privileges of diplomatic or consular

officials under the general rules of international law or under the provisions

of special agreements.Article

29ENTRY

INTO FORCE1. The Contracting

States shall notify each other in writing, through diplomatic channels, of the

completion of the procedure required by the respective laws for the entry into

force of this Agreement. It shall enter into force thirty days after the date

of receipt of the later of the notifications.2. The provisions of

this Agreement shall have effect:a. in India, in respect

of income arising in any fiscal year beginning on or after the first day of

April next following the calendar year in which the Agreement enters into

force; andb. in Kyrgyzstan;i.

respect of taxes withheld at source, in relation to taxable amount paid on or

after the first day of January following the calendar year in which the

agreement enters into force;ii.

respect of other Kyrgyz taxes in relation to profits and income arising in the

calendar year following the calendar year in which the Agreement enters into

force and in the subsequent calendar years.Article

30TERMINATIONThis

Agreement shall remain in force until terminated by one of the Contracting

States. Either Contracting State may terminate the Agreement, through

diplomatic channels, by giving written notice of termination at least six

months before the end of any calendar year after the expiration of five years

from the date of entry into force of the Agreement. In such event, the

Agreement shall cease to have effect:a. in India, in respect

of income arising in any previous year on or after the first day of April next

following the calendar year in which the notice of termination is given; andb. in Kyrgyzstan;i.

respect of taxes withheld at source, in relation to the taxable amount paid on

or after the first day of January following the calendar year in which the

notice of termination is given;ii.

respect of other Kyrgyz taxes in relation to profits and income arising in the

calendar year following the calendar year in which the notice of termination is

given and in subsequent calendar years.IN

WITNESS WHEREOF the undersigned, being duly authorised thereto, have signed

this Agreement.DONE

in duplicate at New Delhi, this the thirteenth day of April, 1999, in the

Hindi, Kyrgyz, Russian and English languages, all four texts being equally

authentic. In case of divergence between the texts, the English text shall

prevail.Sd/-For

the Government of the Republic of

India.................................................(Jaswant

Singh)Sd/-For

the Government of the Kyrgyz Republic...........................(Omuraliev

Esengul Kasymovich)PROTOCOLAt

the signing of the Agreement between the Government of the Republic of India

and the Government of the Kyrgyz Republic for the avoidance of double taxation

and the prevention of fiscal evasion with respect to taxes on income and on

capital, the undersigned have agreed that the following shall form an integral

part of the Agreement.1. With reference to

article 6 it is understood that income from immovable property may be taxed in

both the Contracting States.2. With reference to

article 11 paragraph 3(i) it is understood that the Government in the case of

India shall include a political sub-division.3. With reference to

article 11 paragraph 6 and article 12 paragraph 5 it is understood that in the

case of India interest, royalties or fees for technical services shall be

deemed to arise in a Contracting State if the payer is a political sub-division

of that State.In

witness whereof the undersigned, being duly authorised thereto, have signed

this protocol.Done