Indian Supreme Court dismisses review of MNF tax ruling

The Indian Supreme Court has dismissed a review petition filed in the controversial most-favored-nation (MFN) judgment delivered by it last year in Assessing Officer (International Taxation) vs. M/s Nestle SA.

The controversial ruling concerned MFN clauses in India’s tax treaties with countries including France, the Netherlands and Switzerland. The tax authority had refused to accept the taxpayers’ request for invoking the MFN clauses in the tax treaties, under which a reduced withholding tax rate were to be applied.

The top court, however, found in favour of the tax authority. The court accepted the tax authority’s argument that the MFN clauses could not be invoked because the Indian government did not issue any notification to activate the MFN clause – a prerequisite under Indian domestic legal framework.

Subsequently, the taxpayer filed a petition asking the court to review its own judgment.
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In a short order dated August 6, 2024, the court said that there are no grounds for review and dismissed the review petition.