A decision by the Mauritius cabinet would soon give Indian tax officials more powers to directly question the offshore arms of foreign investors if they suspect that such entities were formed with the prime intention to escape tax. The Mauritius cabinet last week ratified a 2024 tax protocol for amending the agreement between India and Mauritius for avoidance of double taxation and fiscal evasion. According to the highlights of the meeting released by the Mauritius PMO, the benefits under the double taxation avoidance agreement (DTAA) can be denied if one of the principal purposes of an investment is to benefit from the tax treaty. In tax parlance, this is the principal purpose test (PPT) based on OECD framework.