Revenue department looking into companies trading in penny stocks to avoid tax

A day after market regulator SEBI barred 59 entities for  executing fictious trade in illiquid stock options for avoiding taxes, Revenue Secretary Shaktikanta Das on Friday said his department is also in the process of taking action against certain companies  trading in penny stock to avoid capital gains tax. Das also said that the finance ministry will soon take a decision on the A P Shah committee report on past cases of minimum alternate tax on foreign institutional investors (FIIs).

"Let me also mention that this is one area where the revenue department has been working on companies which use certain penny stocks to misuse the provision of capital gains and it is a Matter which our investigation wing is examining it and taking lot of action," Das said at a PHDCCI conference on tax issues.

He said SEBI has certain facts before it and it has enough proof to show that market rules and regulation and practices were not in line with legal provisions but Das attributed selling pressure in Indian stock markets to a multiplicity of factors, most of which are external "Global markets today is in turmoil. Companies across the globa are not doing well," he added. 

Amid global gloom, he said India presents far better picture. "There are only limited number of bright spots in global arena and India is certainly in forefront."

On the Shah panel report on past cases  of  MAT  on FIIs, he  said the government will take very quick decision on this matter. 

When asked if it will be made public or go to Supreme Court, he said it is a matter of detail and I don't want to comment On that.

On demands of imposing safeguard duty on steel imports from China, the revenue secretary some applications have been filed and that is under consideration of the directorate general, safeguards. 

"He has to examine the applications. They will examine very expeditiously. And once the report comes to the government, it will take a decision. There will not be any delay in this matter," he said.