India will raise with Australia the tax issue being faced by Indian IT companies under the double taxation avoidance agreement, during a meeting between the two countries’ trade ministers next month, according to an official. Both countries signed the Double Taxation Avoidance Agreement (DTAA) in 1991 and it was updated in 2013.

India has called for an early amendment of the regulations under the DTAA to stop taxation of the offshore income of Indian firms providing technical support in Australia. Australian trade minister Don Farrell will visit India by the end of September for the joint ministerial commission meeting and India would raise the DTAA regulations issue, the official said.

Commerce and industry minister Piyush Goyal will attend the meeting. New Delhi had emphasised that the amendment of the DTAA regulations was an important issue, which was agreed upon under the trade agreement.

India and Australia signed the Economic Cooperation and Trade Agreement in April but it is yet to come into force. Issuance of visas for Indian students, ratification of trade pact for its early implementation and market access issues relating to commodities such as potato, pineapple, and onion in the Australian market are also expected to come up during the joint ministerial commission meeting scheduled to be held in New Delhi.

A DTAA is signed between nations to help taxpayers avoid paying double taxes on the same income. It comes into play when an individual or a company is a resident of one country but earns income in another country.

Several Indian IT companies, including TCS, Infosys and Wipro, have operations in Australia. Australia is the 17th largest trading partner of India while New Delhi is Canberra’s 9thlargest trading partner. With respect to Australia, India’s goods exports were worth $6.9billion and imports aggregated to $15.1 billion in 2021. Meanwhile, India’s exports rose 2.14 per cent to $36.27 billion in July while the trade deficit almost tripled to $30billion during the month due to an over 70 per cent rise in crude oil imports, according to data released on Friday. Imports shot up by 43.61per cent to $66.27 billion in the month compared with July 2021, the data showed.

The trade deficit was $10.63billion in July 2021. Preliminary data released earlier this month had shown a 0.76 per cent contraction in exports at $35.24 billion for July. However, exports during April-July 2022-23 rose 20.13per cent to $157.44 billion. Imports during the four months increased by 48.12 per cent to$256.43 billion. The trade deficit stood at$98.99 billion against $42 billion in April-July 2021-22.