The finance ministry today constituted a high-level committee of three members to look into the applicability of Minimum Alternate Tax (MAT) on Foreign Institutional Investors (FIIs) before April 2015.
The committee is headed by Justice AP Shah, Chairman of Law Commission of India. The other members include Ashok Lahiri, former Chief Economic Adviser and Girish Ahuja, former Associate Professor of Commerce at Shri Ram College, Delhi.
The government has sought from the committee that it submits its report on the matter expeditiously.
“To begin with, the Committee will examine the matter relating to levy of MAT on FIIs for the period prior to 01.04.2015.The Committee will also examine all the related legal provisions, judicial / quasi judicial pronouncements and such other relevant aspects as it may consider appropriate,” stated the ministry in a press statement.
The government had been caught on the wrong foot after the income tax department had sent notices to FIIs making MAT demand for period between 2007-08 and 2014-15. The total tax demand as informed to the parliament was to the tune of Rs 602 crore.
The finance ministry has also sent out instructions to the tax officers that till the time the committee submits its report on the issue any fresh notices making tax demand should be kept in suspension.
The committee on direct tax matters would also look into other judicial tax matters but those would be announced at a later stage.
The Committee to forms its opinion on the legal aspects of applicability of MAT on FIIs would also be interacting with various stakeholders and could also have discussion with officers from Department of Revenue including Central Board of Direct Taxes (CBDT) for consultations.
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