USIBC applauds ruling on minimum alternative tax

Washington: Applauding Indian government's ruling on Minimum Alternative Tax, the US India Business Council (USIBC)on Tuesday said the tax certainty will promote long-term investments in India.

Union Finance Minister Arun Jaitley announced the government's decision to accept the AP Shah Committee's recommendation that the Minimum Alternative Tax (MAT) provisions do not apply retrospectively to Foreign Institutional Investors (FIIs) before April 1, 2015.

"This announcement demonstrates the Government of India's commitment to attracting long-term foreign investment into the country by providing greater tax certainty and ensuring ease of doing business for the global investment community," said Mukesh Aghi, president USIBC.

This decision reduces tax uncertainty for FIIs and will result in increased investment into India, the USIBC said in a statement.

USIBC supports actions, including those announced in India's Union Budget, supporting a more predictable and consistent tax framework that follows published guidance, respects past court decisions, and conducts audits and investigations without predetermined outcomes and targets for revenue, it added.

In a big relief to FIIs, the government accepted recommendation of a high-level panel that MAT should not be imposed on the overseas investors retrospectively.

Jaitley yesterday said the panel headed by the Law Commission of India Chairman A P Shah submitted its final report on August 25 on the issue of applicability of MAT on capital gains made by FIIs prior to April 1, 2015.