High-level committee to deal with Minimum Alternate Tax issues

The Dollar Business Bureau In a move to address the tax issues concerning the Foreign Institutional Investors (FIIs), the Government of India (GoI) has announced a high-level committee that would look into the tax-related matters involving FIIs. A statement to this effect on ‘setting up of a high-level committee’ was said to have been made by Arun Jaitley, Union Minister of Finance, GoI, on Friday. A high-level committee, announced by the Ministry of Finance, would give its recommendations on the issue of the Minimum Alternate Tax (MAT) that has been imposed on the FIIs by the GoI, say the reports. Further, the Revenue Secretary, Shaktikanta Das, was also quoted to have stated that the issue of MAT on FIIs is being referred to the Committee with a request to give report expeditiously and the government would soon notify the Terms of Reference of the Committee. He further added that the cases of individual companies will not be referred and only policy issues would be referred. This move by the Ministry of Finance comes as a part of the government’s efforts to ensure a friendly tax-regime to the global investors. Pitching for the same, the Finance Minister had earlier informed that a high-level committee headed by Justice A P Shah, the chairman of the Law Commission, will look into the controversial issue of payment of Minimum Alternate Tax (MAT) by FIIs. He had also informed that the decisions on the issues regarding levy MAT on foreign investors were taken by the judicial bodies created before a new government has been formed. The Minister also expressed confidence that the rulings on the issue of MAT claims cannot override India’s international tax treaties, while saying the rulings on the issue of ‘notices sent to the 68 FIIs for payment of dues totaling Rs 602.83 crore towards MAT could be contested in the court.’ However, in many cases, the Minister has reassured the investors of providing a tax system free from political-interference. Tax payers would be treated as partners, but not as the hostages or victims, Jaitley maintained his stand in many occasions, while reiterating the government’s commitment towards ensuring fair treatment of certain kinds of contentious transactions, clarified rules on transfer pricing, among others.    

May 8, 2015 | 2:44 pm IST.