Kabul, 14 September 1975
LETTER-1
AMBASSADOR OF INDIA
Kabul
September 14, 1975
EXCELLENCY,
I have the honour to refer to the Agreement dated the 26th January, 1952 between the Government of India and the Government of Afghanistan
relating to air services and to the discussion between the representatives of our two Governments on the reciprocal exemption of
the airlines of India and Afghanistan from payment of income-tax and to confirm on behalf of the Government of India the following
understandings reached between our two Governments:
1. Income derived from the operation of aircraft by the airlines of Afghanistan shall be exempt from the India tax.
2. Income derived from the operation of aircraft by the airlines of Afghanistan shall be exempt from the Indian tax.
3. The exemption provided for in paragraphs (1) and (2) above shall also apply in respect of participation in pools of any kind regarding
air transport by the airlines of India or Afghanistan; the exemption shall not, however, apply to income from operation of aircraft
in internal traffic in India or Afghanistan.
4. The exemption provided for in paragraphs (1) , (2) and (3) above shall have effect in relation to the income derived from the operation
of aircraft on or after the 26th day of January, 1952, on which date the Agreement relating to air services was signed between India
and Afghanistan.
In case any tax on income relatable to the aforesaid period has been recovered by either Government as of the date of this Agreement,
the same shall be refunded by the Government on an application to be made in this behalf within twelve months of the said date by
the airlines of India or the airlines of Afghanistan as the case may be.
5. It is understood that:
(a) The term “Indian tax” means the income-tax and surtax imposed under the tax laws of India.
(b) The term “Afghanistan tax” means the income tax and the business transactions tax imposed by the Income Tax law of Afghanistan.
(c) The terms “Indian tax” and “Afghanistan tax” shall also include any identical or substantially similar taxes which are imposed
hereafter by India or Afghanistan respectively in addition to or in place of the existing taxes.
(d) The term “airlines of India” or “airlines of Afghanistan” means:
(i) airlines designated by the Government of India or the Government of Afghanistan, as the case may be, in pursuance of the Agreement
dated 26th January, 1952 (as amended or revised from time to time) between the two Governments relating to air services; or
(ii) airlines which are authorised by the Government of India or the Government of Afghanistan, as the case may be, by the general
or special arrangement between the two Governments to operate chartered flights between or beyond their territories.
(e) The term “internal traffic” shall mean traffic which originates and terminates within India or within Afghanistan, as the case
may be.
(f) The term “operation of aircraft” means a business of transportation by air or persons, livestock, goods or mail carried on by
the owners or lessors or charterers of aircraft, including the sale of tickets for such transportation on behalf of other enterprises
and any other activity directly connected with such transportation.
I have the honour also to propose that this letter and Your Excellency’s letter of reply confirming the foregoing understandings,
shall be regarded as constituting an agreement between the two Governments for the avoidance of double taxation of income of enterprises
operating aircraft which shall enter into force on the date of Your Excellency’s reply and shall remain in force indefinitely, unless
either of the Governments gives notice to the other Government of its intention to terminate this Agreement on or before the thirtieth
day of June in any calendar year after the year 1980. In the event of such a notice, this agreement shall cease to be effective:
(a) in India in respect of income assessable for the assessment year commencing on the 1st day of April in the second calendar year
following the calendar year in which the notice is given and the subsequent assessment years; and
(b) in Afghanistan in respect of income assessable for the taxable year commencing on the 1st day of Hamal corresponding to the year
commencing on the 1st day of Hamal corresponding to the 21st day of March, in the second calendar year following the calendar year
in which the notice is given and the subsequent taxable years.
I avail myself of this opportunity to renew to Your Excellency the assurances of my highest consideration.
Sd/-
K.R.P. SINGH,
Ambassador of India in Afghanistan,
Kabul—Afghanistan.
H.E. Mr. SULTAN MAHMOOD GHAZI,
President,
Civil Aviation and Tourism Authority,
Kabul—Afghanistan.
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LETTER-2
September 14, 1975
PRESIDENT
Civil Aviation
And Tourism Authority
EXCELLENCY,
I have the honour to acknowledge the receipt of Your Excellency’s letter of today’s day which reads as follows :
(Not reproduced)
I have further the honour to confirm the foregoing understandings on behalf of the Government of Afghanistan and to agree that Your
Excellency’s letter and my reply thereto shall constitute an agreement between the two Governments as stated in Your Excellency’s
above mentioned letter.
I avail myself of this opportunity to renew to Your Excellency the assurances of my highest consideration.
Sd/-
SULTAN MAHMOOD GHAZI,
President, Civil Aviation and Tourism Authority,
Kabul – Afghanistan
H.E. Mr. K.R.P.SINGH
Ambassador of India in Afghanistan,
Kabul – Afghanistan
