EMBASSY OF THE UNITED STATES OF AMERICA, 　 　　　　　　　　　　　　　　　　　　　New Delhi, September 12, 1989. His Excellency, Dr. N.K. SENGUPTA, Secretary (Revenue), Ministry of Finance, New Delhi. 　　EXCELLENCY: I have the honor to refer to the Convention signed today between the United States of America and the Republic of India for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income and to inform you on behalf of the United States of America of the following: 　　During the course of the negotiations leading to conclusion of the Convention signed today, the negotiators developed and agreed upon a memorandum of understanding intended to give guidance both to the taxpayers and the tax authorities of our two countries in interpreting aspects of Article 12 Royalties and Fees for Included Services) relating to the scope of included services. This memorandum of understanding represents the current views of the United States Government with respect to these aspects of Article 12, and it is my Government's understanding that it also represents the current views of the Indian Government. It is also my Government's view that as our Governments gain experience in administering the Convention, and particularly Article 12, the competent authorities may develop and publish amendments to the memorandum of understanding and further understandings and interpretations of the Convention. 　　If this position meets with the approval of the Government of the Republic of India, this letter and your reply thereto will indicate that our Governments share a common view of the purpose of the memorandum of understanding relating to Article 12 of the Convention. Accept, Excellency, the renewed assurances of my highest consideration. JOHN R. HUBBARD, Ambassador. GOVERNMENT OF INDIA, MINISTRY OF FINANCE, DEPARTMENT OF REVENUE, New Delhi, September 12, 1989. His Excellency, Dr. JOHN R. HUBBARD, Ambassador of the United States of America, New Delhi. 　　EXCELLENCY: I have the honour to acknowledge receipt of Your Excellency's Note of today's date, which reads as follows: 　　"I have the honor to refer to the Convention signed today between the United States of America and the Republic of India for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income and to inform you on behalf of the United States of America of the following: 　　During the course of the negotiations leading to conclusion of the Convention signed today, the negotiators developed and agreed upon a memorandum of understanding intended to give guidance both to the taxpayers and the tax authorities of our two countries in interpreting aspects of Article 12 (Royalties and Fees for Included Services) relating to the scope of included services. This memorandum of understanding represents the current views of the United States Government with respect to these aspects of Article 12, and it is my Government's understanding that it also represents the current views of the Indian Government. It is also my Government's view that as our Governments gain experience in administering the Convention, and particularly Article 12, the competent authorities may develop and publish amendments to the memorandum of understanding and further understandings and interpretations of the Convention. 　　If this position meets with the approval of the Government of the Republic of India, this letter and your reply thereto will indicate that our Governments share a common view of the purpose of the memorandum of understanding relating to Article 12 of the Convention." 　　I have the honour to confirm the understandings contained in Your Excellency's Note, on behalf of the Government of the Republic of India. 　　Accept, Excellency, the renewed assurances of my highest consideration. 　　　　　　　　　　　　　　　　　　　　　　　　　 　N.K. SENGUPTA, 　　　　　　　　　　　　　　　　　　　　　　　　　　 Secretary.