Minimum Alternative Tax (MAT) in Foreign Portfolio Investment (FPI) Justice A.P. Shah Committee has recommended that section 115JB of the Income-tax Act, 1961 may be amended to clarify the inapplicability of MAT provisions to Foreign Institutions Investors (FIIs)/Foreign Portfolio Investors (FPIs). Alternatively, a circular may be issued clarifying the inapplicability of MAT provisions to FIIs/FPIs. The Government has accepted the recommendation of the Committee and decided to carry out appropriate amendment so as to provide that MAT provisions will not be applicable to FIIs/FPIs not having a place of business/permanent establishment in India, for a period prior to 01.04.2015. An appropriate legislative amendment to the income-tax Act is proposed to be carried out. Currently 489 applications are pending before the Authority for Advance Ruling (AAR) for more than six months. Some of them may involve MAT issue besides other issues. Government has created two new benches of AAR, one at Mumbai and the other at National Capital Region vide Notification No. 1/2-015 dated 20.3.2015. Further, vide Sanction Order No. 1/2015 dated 18.6.2015, necessary number of posts have been created for the newly created benches. This was stated by Shri Jayant Sinha, Minister of State in the Ministry of Finance in written reply to a question in Lok Sabha today.
