The high-level Justice A P Shah panel, set up to look into the levy of MAT on FIIs, is likely to submit its report to the Government next week, Finance Minister Arun Jaitley said today.
“Shah panel on MAT may submit report in a week,” Jaitley told reporters here.
The committee constituted in May has held series of consultations with the tax department, various industry chambers, besides institute of chartered accountants of India to elicit their views on levying Minimum Alternate Tax (MAT) on Foreign Institutional Investors (FIIs)
The three-member committee also includes former Chief Economic Advisor Ashok Lahiri and Chartered accountant Girish Ahuja.
The revenue department, according to sources, is of the view that MAT is not applicable on FIIs and the notices were sent to them following a verdict by the Authority of Advance Ruling (AAR).
In 2012, the AAR directed Castleton to pay MAT in India on their book profits when it transferred shares from a Mauritius entity to a Singapore entity.
Assocham, in its representation to committee said, that government should issue a clarification that MAT provisions were never intended and do not apply to FIIs/FPIs.
“It is also requested (that you should) recommend to the Government to direct the revenue authorities to stay the demand raised on FIIs/FPIs and not to take any coercive action, till the time the MAT issue is resolved.
“The above action would be in accordance with the government’s intention of providing a non-adversarial and stable tax regime to the taxpayer in India,” the chamber said.
The Shah Committee has been entrusted with the task of examining MAT notices to the FIIs for the period prior to April 1, 2015.
The Income Tax Department had sent notices to 68 FIIs demanding Rs 602.83 crore as MAT dues of previous years. This has raked up a big controversy, with FIIs moving higher court challenging the MAT demand.
The Budget 2015-16 had exempted FIIs from paying MAT with effect from April 1, 2015.
Following the announcement of setting up of the panel, the tax department directed its field officers to put on hold issuance of fresh notices and any further assessments on levy of MAT on such entities.