High Level Committee To Probe MAT Taxation Of Foreign Companies & FIIs Formed

The Ministry of Finance has issued a press release stating that a High Level Committee (HLC) Headed by Justice A.P. Shah on Direct Tax Matters has been constituted. The Committee consists of leading tax experts. The Committee is required to examine the matter relating to levy of MAT on FIIs for the period prior to 01.04.2015 among others. The Committee has been requested to give its recommendations on the above issue expeditiously


The Union Finance Minister Shri Arun Jaitley, while responding to the discussions on the Finance Bill in Rajya Sabha on 7th May, 2015, had announced the constitution of a Committee headed by Justice A.P. Shah to look into the issue of Minimum Alternate Tax (MAT) on Foreign Institutional Investors (FIIs) as well as other issues which are referred to it .

Accordingly, a Committee headed by Justice A.P. Shah has been constituted.

Following is the composition of the Committee:-

i) Justice A.P. Shah – Chairman

(Former Chief Justice of Delhi High Court and currently Chairman of Law Commission of India)

ii) Dr. Girish Ahuja – Member

(Chartered Accountant and formerly Associate Professor of Commerce, Shri Ram College of Commerce, University of Delhi.)

iii) Dr. Ashok Lahiri – Member

(Formerly Chief Economic Adviser & Executive Director, ADB and currently Chairman of High Level Committee to interact with Trade and Industry on tax laws.)

To begin with, the Committee will examine the matter relating to levy of MAT on FIIs for the period prior to 01.04.2015.The Committee will also examine all the related legal provisions, judicial / quasi judicial pronouncements and such other relevant aspects as it may consider appropriate. The Committee has been requested to give its recommendations on the above issue expeditiously.

As initially the Committee would focus on the issue of MAT on FIIs for giving its report expeditiously, other issues to be referred to the Committee will be notified in due course. The Committee may interact with various stakeholders as it may deem fit. The Committee may also invite officers from Department of Revenue including CBDT for consultations/discussions as may be necessary.

The Committee shall set its own procedure for regulating its work. The term of the Committee will be for one year or such period as may be notified by the Government from time to time.


2 comments on “High Level Committee To Probe MAT Taxation Of Foreign Companies & FIIs Formed
  1. Sekhar Ram says:

    Wonder what is expected of the Committee- —
    From AY 2016-17,law (IT Act )has been amended to exempt Foreign Companies’non-business incomes from MAT.
    For the earlier years, the matter is sub-judice- as the appeal of a FII on the very same issue is pending before the apex court.
    So, what is the purpose that will be served by the recommendation of the Committee?
    Will it recommend that Govt instruct its Counsel to concede the matter before the Apex Court?
    The Govt could have avoided the whole problem by simply issuing a circular that MAT applies only to Companies that are required to prepare financials as per the Indian Companies Act .
    Instead it has helped tax advisers&lawyers earn more income by creating an avoidable controversy and anxiety in the minds of the FIIS who are in India for well over 15 years and lived with the Income Tax Act !!

  2. Rajendra Chauhan says:

    My query in this regard is, until the committee submits its report, and decision is being taken thereon, whether the remittance on account of sale proceed of capital gains (book Profit only)after indexation there is loss, can be remitted without deduction of MAT Tax. further the home country of company is covered in Tax Treaty also.

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