The Central Board of Direct Taxes (CBDT) has issued instructions to field officers not to raise any fresh demand and keep in abeyance the notices sent to foreign institutional investors ( FIIs) on minimum alternate tax ( MAT) “ for the time being”. This follows the government accepting the A P Shah panel’s recommendation of doing away with MAT cases against FIIs prior to April 1 this year.
The Budget has already announced there will not be any MAT on FIIs.
As such, there will not be any follow- up action on the 68 notices sent to FIIs on past MAT cases, with a combined tax dispute amount of Rs.603 crore. Also, there won’t be any further notices in this regard.
The potential tax liability of all past MAT cases on FIIs was pegged at Rs.40,000 crore by the finance ministry.
The CBDT’s directive does away with uncertainty in this regard between now and the day when amendments to the I- T Act are carried out, based on the Shah panel’s report. The government hopes to table the amendments in the winter session of Parliament.
The CBDT has asked officers to take note of the fact that it has been decided to carry out appropriate amendments to the income tax Act “so as to prescribe that MAT provisions will not be applicable to FIIs or foreign portfolio investors ( FPIs) not having a place of business/ permanent establishment in India for the period prior to April 1, 2015.
“Accordingly, the field authorities are advised to take into consideration the above position and keep in abeyance, for the time being, the pending assessment proceedings in cases of FIIs/ FPIs. They are further advised not to pursue the recovery of outstanding demands, if any, in such cases.” On Tuesday, Finance Minister Arun Jaitley had said the government had accepted the recommendations of the Shah panel, set up to study the issue of MAT on FIIs, adding the income tax Act would be amended to clarify foreign funds won’t be subject to MAT.
The A P Shah panel sought the government either ask the CBDT to issue a circular that MAT wasn’t applicable to FIIs and FPIs prior to April 1 2015 or amend the relevant section of the I- T Act.
“FIIs are mostly open- ended investment funds, which permit their investors to enter and exit daily, based on the NAV ( net asset value) of the fund, unanticipated tax liability (or the fear thereof) relating to previous years, which would have to be borne by the current investors, maybe asufficient trigger for the investors
There will not be any follow- up action on the 68 notices sent to FIIs on past MAT cases, with a combined tax dispute amount of Rs.603 crore.
Business Standard, New Delhi, 04 September 2015
The Budget has already announced there will not be any MAT on FIIs.
As such, there will not be any follow- up action on the 68 notices sent to FIIs on past MAT cases, with a combined tax dispute amount of Rs.603 crore. Also, there won’t be any further notices in this regard.
The potential tax liability of all past MAT cases on FIIs was pegged at Rs.40,000 crore by the finance ministry.
The CBDT’s directive does away with uncertainty in this regard between now and the day when amendments to the I- T Act are carried out, based on the Shah panel’s report. The government hopes to table the amendments in the winter session of Parliament.
The CBDT has asked officers to take note of the fact that it has been decided to carry out appropriate amendments to the income tax Act “so as to prescribe that MAT provisions will not be applicable to FIIs or foreign portfolio investors ( FPIs) not having a place of business/ permanent establishment in India for the period prior to April 1, 2015.
“Accordingly, the field authorities are advised to take into consideration the above position and keep in abeyance, for the time being, the pending assessment proceedings in cases of FIIs/ FPIs. They are further advised not to pursue the recovery of outstanding demands, if any, in such cases.” On Tuesday, Finance Minister Arun Jaitley had said the government had accepted the recommendations of the Shah panel, set up to study the issue of MAT on FIIs, adding the income tax Act would be amended to clarify foreign funds won’t be subject to MAT.
The A P Shah panel sought the government either ask the CBDT to issue a circular that MAT wasn’t applicable to FIIs and FPIs prior to April 1 2015 or amend the relevant section of the I- T Act.
“FIIs are mostly open- ended investment funds, which permit their investors to enter and exit daily, based on the NAV ( net asset value) of the fund, unanticipated tax liability (or the fear thereof) relating to previous years, which would have to be borne by the current investors, maybe asufficient trigger for the investors
There will not be any follow- up action on the 68 notices sent to FIIs on past MAT cases, with a combined tax dispute amount of Rs.603 crore.
Business Standard, New Delhi, 04 September 2015
Comments
Post a Comment