INCOME TAX

Charge of expenditure-tax from World Bank Mission staff and other international organisations--Clarification regarding

Circular No. 658

Dated 2/9/1993

Under section 3 of the United Nations (Privileges and Immunities) Act, 1947, read with section 18 of the Schedule to the said Act, officials of international organisations like the World Bank Mission staff staying in hotels on official duty, are accorded the same privileges in respect of exchange facility as are accorded to the officials of comparable ranks forming part of Diplomatic Missions to the Government concerned. Based on this provision, the Board, vide Circular No. 637, dated September 2, 1992**, clarified that the officials of such international organisations covered by section 18 of the Schedule to the aforesaid Act shall be entitled to exemption from the levy of expenditure-tax.

2. The exemption from the levy of expenditure-tax in respect of any expenditure which is incurred or the payment for which is made in foreign exchange has since been withdrawn from October 1, 1992. The Board has now been advised that consequent to this amendment in section 5 of the Expenditure-tax Act, the officials of the international organisations to which the provisions of section 18 of the Schedule to the United Nations (Privileges and Immunities) Act, 1947, have been extended including the World Bank Mission staff staying in hotels on official duty shall no longer be entitled to exemption from the levy of expenditure-tax on the chargeable expenditure incurred by them. However, the chargeable expenditure for the levy of expenditure-tax will continue to exclude the expenditure incurred by persons within the purview of the Vienna Convention on Diplomatic Relations, 1961, or the Vienna Convention on Consular Relations, 1963.

3. The Board Circular No. 637, dated September 2, 1992*, stands modified accordingly.

(Sd.) M. N. Dikshit,

Director (OT),

Central Board of Direct Taxes.