A P Shah Committee recommends MAT relief to FIIs

Union Finance Ministry appointed committee chaired by retired SC judge A P Shah has recommended that Minimum Alternate Tax (MAT) should not be imposed on FIIs retrospectively for the period preceding 1st April 2015 This recommendation is considered as a big relief to FIIs as government had exempted them from MAT starting April 1, 2015 in the Union Budget for 2015-16 but had not made the clarification retrospective imposition. In its report committee has mention that there is no legal basis for levying 20 per cent MAT on past capital gains of FIIs. Background Union Finance Ministry had appointed this 3 member Committee on the issue of levying MAT on capital gains made by FIIs retrospectively. Members of Committee: A P Shah (Chairman), Dr. Girish Ahuja and Dr. Ashok Lahiri. The committee was constituted after the tax department had sent legal notices to 68 FIIs demanding around six hundred crore rupees as MAT dues of previous years. This had raked up a MAT controversy within FIIs and they had moved to court challenging this tax imposition.