India’s Committee on Direct Taxes on May 26 requested that stakeholders submit written comments on the issue of whether the government should impose minimum alternate tax (MAT) on gains of foreign financial institutions (FFIs) that arose prior to April 1.
Submission authors may be asked to respond to questions about their comments between June 29 and July 6.
India began assessing MAT on FFIs gains for the first time following the government’s February budget. The budget pronounced that MAT would not apply to FFIs from April 1, but was silent regarding transactions undertaken before that date.
Following intense criticism, India’s Central Board of Direct Taxes on May 11 instructed field officers to stop issuing new tax assessments against foreign companies for MAT except in cases where the statue of limitations was about to expire. The government also told the officers to halt action in cases that are underway.
The Indian government then tasked the Committee on Direct Taxes to look into the issue. The committee is headed by Justice A.P. Shah, who is former Chief Justice of Delhi High Court and current Chairman of the Law Commission of India.
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