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

Indian Aviation Academy unveiled

Union minister for civil aviation, P Ashok Gajapathi Raju unveiled a new campus of the Indian Aviation Academy (IAA) spread over 5.33 acres. Civil aviation, secretary, R N Choubey said India is poised to attain its coveted place on global aviation arena as one among top three largest aviatio

BHEL surpasses 12th plan capacity addition target

Attributing enhanced focus on project execution as the reason behind Bharat Heavy Electricals Limited’s (BHEL) growth, the enterprise’s CMD Atul Sobti said BHEL achieved a capacity addition of 45,274 MW during the 12th five year plan period (2012-17) and surpassed the target of 41,661 MW by 9 p

No right to plan their families

Bhadiya from Bhanpur Kheda village does not know her age. She has five children – the eldest one is 12-year-old while the youngest is an infant. Considering she got married in her teens – like most women in her village – Bhadiya must be in her 30s. After giving birth to five children she

SAIL to leverage domestic growth potential

Steel authority of India (SAIL) chairman PK Singh expressed confidence on improving the performance of the Maharatna PSU in the current fiscal because of a host of initiatives in almost every area of operations. During 45th annual general meeting of the company, Singh said the world steel as

TRIFED to scale up marketing of tribal products

Ministry of tribal affairs’ PSU— tribal cooperative marketing development federation of India limited (TRIFED) is contemplating to scale up marketing of tribal products through increase at its retail outlets throughout the country. TRIFED plans to scale up the retail marketing ac

Facebook and post-truth

It is not very often that Facebook advertises in newspapers. Last time it did was a year ago when it was promoting `free basics`— a limited internet service provided for free to subscribers of partnering telecom service providers. The internet platform’s reach is unparalleled vis-a-vis to tradi



Video

Current Issue

Opinion

Facebook    Twitter    Google Plus    Linkedin    Subscribe Newsletter

Twitter