Union Minister of State for Finance Jayant Sinha today said the A P Shah Committee’s recommendation to grant relief to FIIs on Minimum Alternate Tax (MAT) will be a positive for the market. “The Shah report in fact has come out. I believe they have said the Minimum Alternate Tax (for the period before April 1, 2015) issue should be resolved quickly, which I think will be positive for the market…,” he told reporters at the launch of ‘Innofest’ at the Indian Institute of Science here.
The panel, headed by Law Commission Chairman A P Shah, 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. The notices were served to these FIIs after the Authority for Advance Rulings (AAR) in 2012 had directed Castleton to pay MAT in India on its book profits when the company transferred shares from a Mauritius entity to one in Singapore.
The issue at hand is whether the government would waive MAT prior to April. Sinha is optimistic that the growth is going to continue in India in spite of the current global volatility because “there are many other positives” in global and Indian economies. “(Market) tends to see volatility because of the growth slowdown in China and Fed looking to raise rates – obviously there is a time of turbulence, but of course, overall, there are many other positives in the global economy and certainly (as far as) India is concerned, there are a number of positives. So, I am sure the growth is going to continue in India,” he said.