GoI to press ahead with Rs 40,000 crore tax demand on FIIs
The Foreign Institutional Investors (FIIs) may have to face an Rs 40,000 crore tax demand by the Government of India, after having lost a case against tax payment on capital gains. “The government will press ahead with Rs 40,000 crore tax demand on FIIs, as they have lost a case against levy of tax on capital gains they made,” stated the Union Finance Minister Arun Jaitley on Tuesday, according to the reports. The Union Finance Minister was quoted to have informed that the FIIs have gone to the tribunal called ‘Authority for Advance Rulings’ against the levy of 20% Minimum Alternate Tax (MAT) on capital gains and the ruling came against them. “The amount involved in the case is Rs 40,000 crore and I can change the face of Indian Irrigation with this amount,” he added. Jaitley further said that the government has taken decision for abolition of MAT from April 1, 2015, but the latest tax demand pertains to the tax that is related to an earlier period and waiving off the same after the case has been won, will come under tax haven. On the tax demands made on the Cairn Energy Plc of UK and Cairn India, the Union Minister informed that the tax assessment orders were passed in January 2014 and the tax demands are follow-up notices. He was also said to have made it clear that the government will not levy any more retrospective taxes, but the ongoing cases would be resolved through the necessary channels. Further speaking on the government’s initiatives, the Union Minister expressed hope that the bill for the introduction of Goods and Services Tax will be passed in the upcoming Parliament session. He exuded the confidence that the new indirect tax regime would be implemented from April 1, 2016.
This article was published on April 15, 2015 – 7.45 pm IST.
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