In­dia may waive ret­ro­spec­tive MAT tax on for­eign in­vestors

The Pak Banker - - BUSINESS -

In­dia's fi­nance min­istry is likely to ac­cept a pro­posal from a spe­cial panel to waive ret­ro­spec­tive im­po­si­tion of a con­tro­ver­sial min­i­mum al­ter­nate tax (MAT) on for­eign port­fo­lio in­vestors, do­mes­tic media re­ported, cit­ing gov­ern­ment sources.

Such a de­ci­sion could put to rest a con­tro­versy sparked af­ter tax author­i­ties started claim­ing MAT pay­ments from for­eign funds late last year.

Although MAT has been ap­plied to do­mes­tic com­pa­nies to en­sure a min­i­mum tax pay­ment, it had never been im­posed on for­eign in­sti­tu­tional in­vestors (FIIs).

The gov­ern­ment sub­se­quently said it would no longer im­pose MAT on for­eign in­vestors from April 2015 and set up a spe­cial panel in May to ad­vise it how to pro­ceed with ret­ro­spec­tive claims al­ready made by tax author­i­ties, which have been chal­lenged in courts.

"The com­mit­tee has rec­om­mended giv­ing re­lief to FIIs on MAT prior to the pe­riod of Apr. 1, 2015, and the gov­ern­ment is favourably con­sid­er­ing it," in­de­pen­dent news provider NewsRise Fi­nan­cial quoted a gov­ern­ment of­fi­cial as telling re­porters on Fri­day in New Delhi.

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