MAT on FIIs: AP Shah panel submits report to Arun Jaitley

NEW DELHI: A panel headed by law commission chairman AP Shah to examine the vexed issue of minimum alternate tax ( MAT) on foreign portfolio investors has submitted its report to the government.

“It’s a 66-page report. We have received responses from industry, chartered accountant firms, CBDT and leading advocates,” Shah said after submitting the report to finance minister Arun Jaitley. “The government will take a decision on the recommendations as soon as possible,” revenue secretary Shaktikanta Das said.

Das said the government will give due “weightage” to the report that comes ahead of the hearing of the Castleton case in Supreme Court on August 4. The panel’s recommendations are expected to guide the government’s stance in the case on the issue.

Asked about the recommendations and if the foreign investor community can expect some relief, Shah said: “It is not about giving any relief. We examined the issue that arose out of the Castleton judgements and others. It takes a complete and holistic view of the subject.” The Castleton case refers to a ruling by the Authority on Advanced Rulings (AAR) which had said in 2012 that MAT could be imposed on foreign investors in stocks and bonds.

Shah said the terms of reference for the panel was the issue of levy of MAT on FIIs prior to April 2015 and it has responded to that. “The term of reference was MAT on FIIs. We answered that,” he added without elaborating but added that the three member panel has given a consensus report.

“It is expected that the government will rely on the committee’s report when the Supreme Court hears Castleton early next month. If the report is favorable to the FPIs, the government might probably not press for levy of MAT before the Supreme Court,” Rajesh H Gandhi, Partner, Deloitte Haskins & Sells LLP.