Moving Beyond the Principal Purpose Test: An Indian Perspective on Tackling Abusive Treaty Shopping
Paras Khetan
What the paper says
Recently, there has been an increasing engagement with the Principal Purpose Test (PPT) in India through case law and circulars issued by the income tax authorities. In light of the above, this article provides an extensive review of the anti-treaty abuse jurisprudence in India, with a specific focus on the implementation of the PPT as an anti-treaty abuse tool. Specifically, it argues against the implementation of the PPT in India. The incorporation of a vague standard such as the PPT as a general anti-abuse tool muddles the already existing vibrant domestic anti-abuse statutory provisions and jurisprudence in India by creating conflicting anti-abuse frameworks. Thus, it is argued that India would do well to rely on domestic GAAR provisions, along with treaty SAAR provisions, to tackle treaty abuse and move away from the PPT as an anti-abuse tool.
Evidence weight
Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40
| F · citation impact | 0.50 × 0.4 = 0.20 |
| M · momentum | 0.50 × 0.15 = 0.07 |
| V · venue signal | 0.50 × 0.05 = 0.03 |
| R · text relevance † | 0.50 × 0.4 = 0.20 |
† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.