Shah panel begins stakeholder deliberation on FII MAT issue

first_imgThe high-level Justice A P Shah panel, set up to look into levy of MAT on FIIs, has begun consultations with stakeholders including an industry body which said it should not apply on such investors.The committee met representatives of Ficci, CII, Assocham and American Chamber of Commerce (Amcham) as well as experts from KPMG, EY and Deloitte.It is scheduled to hold further consultations with Institute of Chartered Accountants of India, Pricewaterhouse Coopers and other expert groups. Also Read – I-T issues 17-point checklist to trace unaccounted DeMO cashHeaded by Law Commission Chairman A P Shah, the panel was formally constituted in May with former Chief Economic Advisor Ashok Lahiri and Chartered accountant Girish Ahuja as other two members.In its representation to the committee, Assocham said the government should issue a clarification that Minimum Alternate Tax 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.  Also Read – Lanka launches ambitious tourism programme to woo Indian tourists“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.Although the Shah panel has one-year term, sources said the committee would submit its report on the MAT issue much earlier as the Finance Ministry is keen that it gives its recommendations “expeditiously”.The Shah committee has been entrusted with the task of examining MAT notices to the Foreign Institutional Investors 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 demand.Finance Minister Arun Jaitley in Budget 2015-16 has exempted FIIs from paying MAT with effect from April 1, 2015.Following the announcement of setting up of the panel, the tax department has directed its field officers to put on hold issuance of fresh notices and any further assessments on levy of this tax on such entities.last_img