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बेसिक इंग्लिश का दूसरा सत्र (कक्षा प्रारंभ : 22 अक्तूबर, शाम 3:30 से 5:30)
Government Accepts A.P. Shah Committee Recommendations on MAT
Sep 03, 2015

A Committee on Direct Tax matters chaired by Justice A.P. Shah was constituted with the initial mandate to examine the matter relating to levy of MAT on FIIs/FPIs for the period prior to April 1, 2015. The Committee has submitted its final report on applicability of MAT on FIIs/FPIs for the above said period to the Government on August 25, 2015.
The panel was set up to resolve the dispute between FIIs and the government after notices were served to 68 FIIs by the Income Tax Department demanding Rs.602 crore as MAT dues.

Key Recommendations

  • The Committee has recommended that section 115JB of the Income-tax Act may be amended to clarify the inapplicability of MAT provisions to FIIs/FPIs.
  • The Committee has suggested that a Circular may be issued clarifying the inapplicability of MAT provisions to FIIs/FPIs.
  • The Government has accepted the recommendation of the Committee to clarify the inapplicability of MAT to FIIs/FPIs and has decided that an appropriate amendment to the Income-tax Act will be carried out.
  • Through the amendment the Government proposes to clarify that MAT provisions will not be applicable to FIIs/FPIs not having a place of business/permanent establishment in India, for the period prior to April 1, 2015.
  • Pending such amendment, CBDT will convey to the field formations the decision of the Government to accept the recommendation.
  • This means the Rs 602-crore demand notice sent to 66 FIIs/FPIs will now be on hold. All the notices that have already been issued will now be interpreted in accordance with the pre April 1, 2015 law. So what applies post April 1, 2015, will also apply pre April 1, 2015.


A related matter is pending in the Supreme Court of India, which comes up for hearing in September 2015, and it is likely that the Finance Ministry will put forth the A.P. Shah committee’s recommendation as the government’s stance to accord a stamp of judicial approval to the retroactive non-application of the MAT provisions.


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