Tax dept asks officials not to pursue pending MAT cases

Source: PIB, Government of India

Following the acceptance of recommendation of the Justice A P Shah Committee, the Central Board of Direct Taxes (CBDT) advised its field authorities to keep in abeyance, for the time being, the pending assessment proceedings in cases of Foreign Institutional Investors (FIIs)/ Foreign portfolio investors (FPIs) involving the applicability of  Minimum Alternate Tax (MAT) for the period prior to April 1, 2015. CBDT further advised the authorities not to pursue the recovery of outstanding demands, if any, in such cases. A committee on direct tax matters chaired by Justice A P Shah was constituted to examine the issue of applicability of MAT on FIIs/FPIs for the period prior to April 1, 2015. The Committee has submitted its final report to the government on August 25, 2015. The Committee has recommended that Section 115JB of the Income Tax Act, 1961, may be amended to clarify the inapplicability of the provisions of Section 115JB to FIIs/FPIs having no permanent establishment (PE)/place of business in India. The government has accepted the said recommendation and it has been decided to carry out the appropriate amendment in the Act so as to prescribe that MAT provisions will not be applicable to FIIs/FPIs not having a place of business permanent establishment in India, for the period prior to April 1, 2015.  An instruction to this effect has been issued by the CBDT on Wednesday.  

September 03, 2015 | 4:39pm IST.