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2012 (6) TMI 686 - ITAT, KOLKATADTAA between India and Singapore - whether ‘education cess’ and ‘higher education cess’ can be levied in addition to the tax rates prescribed in DTAA - assessee(Singapore company), offered interest and royalty income to tax at the rate of 15% & 10% as specified in Articles 11 & 12 of the India-Singapore DTAA respectively - Held that:- Under Articles 11 & 12 of the said DTAA, tax charged on interest and royalties cannot exceed 15% and 10% respectively. The expression ‘tax’ is defined in Article 2(1) to include ‘income tax’ and is stated to include ‘surcharge’ thereon, so far as India is concerned. Article 2(2) further extends the scope of the ‘tax’ by laying down that it shall also cover “any identical or substantially similar taxes which are imposed by either Contracting State after the date of signature of the present Agreement in addition to, or in place of, the taxes referred to in paragraph 1”. "Education cess, introduced by the Finance Act, 2004, described in Section 2(11) of the Finance Act 2004, is nothing but in the nature of an additional surcharge. Accordingly, the “education cess” being in the nature of an “additional surcharge” is covered by Article 2. Accordingly, education cess cannot indeed be levied in respect of tax liability of the appellant company - Decided in favor of appellant.
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