Tax notice to FIIs is not tax terrorism, says Jaitley

“We are targeting tax stability but India should not be treated as a tax haven,” says FM at CII meet

GN Bureau | April 6, 2015


#Arun Jaitley   #CII   #finance minister   #tax notice   #FIIs   #foreign financial institutions   #MAT  

Union finance minister Arun Jaitley has termed tax notices sent to around 100 overseas funds as as legitimate tax demand and not tax terrorism. Jaitley said taxes need to be paid where the demand was right, while wrongful demand would go into litigation.

Speaking at inauguration of CII national conference and annual session the finance minister said “we are targeting tax stability but India should not be treated as a tax haven."  Jaitley promised to appoint a group to oversee working of new companies act to find out where the shoe pinches. He also said the government will move GST (goods and services tax) Constitutional Amendment Bill in Lok Sabha in next few weeks.

Nearly, 100 overseas funds have been slapped with tax notices estimated at $5-6 billion for 'untaxed gains' made by them in the Indian markets over the past years. They have now approached the government citing fresh concerns over the Indian tax regime. These foreign institutional investors (FIIs) got notices from the tax department for a controversial minimum alternate tax (MAT) of 20 per cent, while they are now being followed up with assessment orders.

Top officials said that the Authority for Advance Rulings had ruled in tax department's favour, which allows it to levy MAT on capital gains. "Every action against foreign players should not be blown out of proportion. Other countries have similar laws, India alone doesn't have such laws," a senior official has said. The notices are in line with the norms prior to the introduction of the Finance Bill 2015.

The FIIs have, however, decided to challenge the tax demands, stating that MAT cannot be levied on FIIs or foreign portfolio investors (FPIs) as they do not earn any 'business income' in India and their income is defined as ‘capital gains’ under the I-T Act. The government has proposed to amend the law. However, the amendments will take effect from April, 1, 2016.

Officials defended the notices saying that they have been issued under the current legal regime.

Comments

 

Other News

Goa Shipyard and MTU, Germany to manufacture MTU engines in India

Goa Shipyard Ltd (GSL) and MTU, Germany have agreed to cooperate in the  local manufacturing of technologically-advanced MTU series 8000 engines in India. Under the agreement, which was signed at India’s leading defence trade show Defexpo-18, the companies will manufacture the 16-

ONGC employees bag 13 medals at the Gold Coast CWG

ONGC sportspersons outshone other participants in their respective categories in the recently concluded Commonwealth Games in Gold Coast, Australia. ONGCians bagged 13 medals including 5 Gold, 3 Silver and 5 Bronze, contributing to the 66 medal tally of Team India. ONGCians Ragala Venkat Rah

BHEL bags renovation and modernisation order

Bharat Heavy Electricals Limited (BHEL) has bagged an order for the renovation and modernisation (R&M) of electrostatic precipitators (ESP) at Ramagundam super thermal power station. The Rs 137 crore-turnkey-order envisages carrying out R&M of ESPs of three units of 200 MW each at Ra

Congress’s real agenda is Save Dynasty: Amit Shah

As the Congress leads a bunch of opposition parties in preparing to move an impeachment motion against the chief justice of India, Dipak Misra, BJP president has said its real agenda is not to save the constitution but to save the “dynasty”. Shah has turned to Facebook, posting a

On World Book Day, how about a dip into India’s REAL best-sellers?

There are a few fortunate people for whom every day is a World Book Day, but for the rest it comes once in a year. There are all sorts of international days of this and that, but thanks to social media people are acquiring the habit of wishing and celebrating this or that day these days. Those who’d

First phase of PMUG project likely to be completed before deadline

GAIL (India) Limited has placed pipe laying orders of Rs 780 crore for around 530 km of pipeline connectivity from Bokaro to Angul for Jagdishpur-Haldia & Bokaro-Dhamra Natural Gas Pipeline (JHBDPL) project. With this, major contracts of the project, i.e. pipe supply and laying contract orders for 2200

Current Issue

Current Issue

Video

CM Nitish’s convoy attacked in Buxar

Opinion

Facebook    Twitter    Google Plus    Linkedin    Subscribe Newsletter

Twitter