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Experts hope Shah committee’s MAT report will be sans googlies
Chennai: Tax experts are hoping that there are no googlies in the Justice A.P.Shah panel report on the levy of minimum alternate tax (MAT) on foreign institutional investors (FII) and foreign portfolio investors (FPI) and expect the recommendations to be taxpayer- friendly.
Finance Minister Arun Jaitley said in New Delhi on Thursday that the Shah panel is expected to submit its report some time next week.
“I hope there are no googlies in the Shah committee report on the applicability of MAT on foreign investors,” Sunil Jain, partner in national law firm J. Sagar Associates, told IANS on the phone from New Delhi.
“It is expected that the panel shall suggest the ministry of finance clarify the matter to avoid unwarranted litigation on this issue, and issue a clarification that MAT provisions were never intended to apply to FIIs/ FPIs at any point of time and the amendment made via the Finance Act, 2015, is clarificatory in nature,” said Rakesh Nangia, managing partner of accounting firm Nangia & Co.
Tax experts IANS spoke to are of the view that the committee is a way for the government to extradite itself from a sticky or a taxing situation.
According to Jain, MAT is applicable only to companies that have a place of business in India and not to those that do not have one.
“The legislative intent of MAT provisions limits the applicability of Section 115JB to the companies formed and registered under the Companies Act and foreign companies that had established a place of business within India,” Nangia said.
He said while introducing an amendment in section 115-JB of the Act in 2002, the relevant “notes on clauses” relating to the Finance Bill, 2002, clearly indicated this section only provided for levying MAT on domestic companies.
According to Jain, the matter could have been resolved without much fuss by the finance ministry issuing an appropriate circular rather than taking a complicated route.
“A circular which is favourable to a tax payer will generally hold the test of law,” Jain said.
According to Nangia, the matter was at the cusp of resolution a year back, when a public stakeholder consultation window consisting of tax authorities and the industry, titled Tax Forum, was created by the previous government.
The Federation of Indian Chambers of Commerce and Industry (FICCI) and the Confederation of Indian Industry (CII) representing industry, raised the issue in the context of particular observations and conclusions of the Authority for Advance Rulings (AAR) in the case of Castleton Investment Ltd (AAR No 999 of 2010).
The Tax Forum concluded that non-permanent establishment FIIs were not liable to pay MAT and suggested to the then finance minister that the ministry clarify the matter to avoid unwarranted litigation on this issue. It also said the tax authorities should be instructed that MAT should apply only to foreign companies that had a permanent establishment in India in case of a treaty country, or had established a place of business in India within the meaning of Section 591 of the Companies Act and where the foreign company was required to maintain accounts in India.
In May, the government constituted the three-member Shah Committee to look into controversial MAT demand on foreign companies.
The panel also comprises former chief economic advisor Ashok Lahiri and renowned chartered accountant Girish Ahuja. Its term runs for one year.
The finance ministry, in a statement, also said other tax issues would be referred to the committee in due course.
The Income Tax department had served notice on 68 foreign institutional investors (FIIs) demanding Rs 602.83 crore as MAT dues of previous years. The FIIs, in turn, moved court challenging the demand.
The Shah committee was set up to examine MAT notices prior to April 1, 2015 and was requested to “give its recommendations expeditiously”.
Jaitley, in the budget for 2015-16, had exempted FIIs from paying MAT with effect from April.
The Central Board of Direct Taxes (CBDT) had said it will not issue any new demands for payments, and will take no coercive action to pursue claims that have already been filed.
Even after Jaitley’s announcement, the income tax department served notice on at least 90 foreign portfolio investors (FPIs).
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Dr. Abhishek Verma Dedicates a Shelter in Memory of His Mother, Veena Verma, at KGMU; Inaugurated by Daughter Nicolle Verma
World-renowned business tycoon Dr. Abhishek Verma has supported Foodman Vishal Singh’s Hunger-Free World mission. In memory of his mother, Late Veena Verma, who was a 3 term Rajya Sabha MP.
Dr. Verma dedicated a state-of-the-art free permanent shelter for the attendants of patients at KGMU Medical University, Lucknow, under the aegis of Vijay Shree Foundation. His daughter, Nicolle Verma, inaugurated the shelter.
During the event, Foodman Vishal Singh honored Nicolle Verma by presenting her with a memento. Mrs. Nidhi Sharma and Avantika Yadav, associated with the organization, welcomed her with garlands. Following this, Nicolle Verma distributed essential items to the attendants and also handed out fruits. She became emotional remembering her grandmother on her birth anniversary.
On this occasion, she also inaugurated the “Veena Verma Sevalaya” in memory of her grandmother, Veena Verma, to serve the attendants. She expressed, “I feel proud that my family is engaged in nation-building as well as social service. Today, in collaboration with Vijay Shree Foundation founder Foodman Vishal Singh Ji, I feel immensely proud to dedicate this shelter for the poor, helpless, and needy attendants of patients battling serious illnesses like cancer. I am honored to be associated with the Hunger-Free World Mission for humanity.”
Inspired by the continuous humanitarian service provided by Vijay Shree Foundation over the past 17 years, Nicolle Verma donated 10 lakh rupees to support the cause. The purpose of this donation is to ensure that services continue for the needy attendants of patients suffering from severe illnesses in hospitals, as facilitated by Foodman Vishal Singh.
It is noteworthy that Dr. Abhishek Verma’s family has a legacy of public and philanthropic service. They are helping millions to carry forward the values and service work of their parents. On the occasion of his mother’s birth anniversary, Dr. Abhishek Verma dedicated this state-of-the-art permanent shelter at Lucknow Medical College to serve the attendants of patients through the Vijay Shree Foundation.
Supporting Foodman Vishal Singh’s Hunger-Free World mission, Dr. Abhishek Verma assured that he would continually support keeping this flame of humanity alive. He also promised to assist in providing medicines to the helpless patients.
Continuing her grandmother’s legacy of service, Nicolle Verma personally served food to the needy patients and attendants. She said, “It is our good fortune to have received the joy of doing this noble work today through Foodman Vishal Singh. I have taken another step forward in carrying my family’s values and cooperation by joining hands with the Vijay Shree Foundation. My father taught me to serve and help the needy, and I feel happy when I bring a smile to someone’s face.”
On the birth anniversary of the late Veena Verma, the event organizer, Vijay Shree Foundation founder Foodman Vishal Singh, said, “We feel proud and happy that Dr. Abhishek Verma, a globally renowned business tycoon, has extended his support to uplift our country from the hunger index. Today, on his mother’s birth anniversary, he inaugurated a state-of-the-art permanent shelter at Lucknow Medical College, which will always be helpful for the needy attendants of patients. It is a pleasure for me and the organization to receive the affection of Mr. Verma.”
The event was attended by General Manager Verma Family Office Hemant Garg, Sonu Rajput, and the organization’s volunteers, including Sandeep Singh, Parmeshwar Ji, Prashant Rao Gautam, Balram Singh, Ramesh Chaudhary, Suman, Jeetu, Anil, Suraj, Vinay, Manish Bhadauria, Manas Mehrotra, Vivek, Apurv, Happy, and others.
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