The Income Tax Department had sent notices to 68 foreign institutional investors (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.
Constituting the three-member A P Shah Committee that will look into MAT demand on FIIs, the government today named former CEA Ashok Lahiri as a member of the panel which will "expeditiously" suggest ways to resolve the dispute.
The Finance Ministry also said other tax issues would be also referred to the three-member committee in due course. Renowned chartered accountant Girish Ahuja is the third member of the panel, whose term is one year.
The Income Tax Department had sent notices to 68 foreign institutional investors (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 Shah committee will examine MAT notices for the period prior to April 1, 2015, a Finance Ministry statement said, adding the committee has been requested to "give its recommendations expeditiously".
"As initially the committee would focus on the issue of MAT on FIIs for giving its report expeditiously, other issues to be referred to the committee will be notified in due course," it added.
The committee will examine all the related legal provisions, judicial/quasi judicial pronouncements.
Finance Minister Arun Jaitley in Budget 2015-16 has exempted FIIs from paying MAT with effect from April 1, 2015.
Jaitley had announced setting up of the Shah Committee in Rajya Sabha earlier this month. Besides, MAT issue, the committee would look into few other "legacy" tax cases, he had said.
"The committee may interact with various stakeholders as it may deem fit. The committee may also invite officers from Department of Revenue including CBDT for consultations/ discussions as may be necessary," it added.
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.
"Issue of fresh notice for reopening of cases as also completion of assessment should also be put on hold unless the case is getting barred by limitation," a CBDT circular had said.
As FIIs pulled out funds from markets, the Government last month sought to soothe the nerves of jittery foreign investors saying those FIIs coming from countries with which India has a double taxation avoidance pacts would be exempt from the 20 per cent MAT levy.
Jailtey had abolished MAT on FIIs from April 1, 2015.
As per a 2010 AAR ruling, MAT was not applicable on FIIs. However, AAR verdict in 2012 said it was applicable on FIIs.
"Now it's for the courts to clarify which of the two is correct. Therefore, we are waiting that after summer vacations when courts assemble, they do expeditiously take up this matter," Jaitley told AIR's FM Gold channel.
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
)
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
)
){kind=small}
){kind=small}
)
)
)
)
)
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}