Govt to study HC stay order on MAT levy on FIIs

With a foreign fund house getting a court stay on the controversial MAT levy, the tax department today said it will study the Bombay High Court order before taking a view on the matter.
"I have yet not studied the Bombay High Court order on MAT notice to Aberdeen.... We will have to see if it is a general stay order. We will have to see if capital gains exemptions applies to Aberdeen under the bilateral tax treaty (DTAA)," Central Board of Direct Taxes (CBDT) Chairperson Anita Kapur said today.
In a breather to foreign portfolio investors (FPIs), the Bombay High Court today stayed tax notice issued to Aberdeen.

The interim stay assumes significance as it comes a day ahead of the High Court taking up the writ petition filed by five FPIs last week against MAT notices issued by tax authorities.
The High Court, while posting the Aberdeen petition for hearing on June 22, granted interim relief to the company by staying the I-T notice and orders.
Earlier Finance Minister Arun Jaitley, who was in Baku, Azerbaijan, to attend an ADB meeting had told CNBC TV 18 there that "this (tax demand on FIIs) is a legacy issue...When they represented to me, we amended the law so for the future the problem does not exist. It's a past issue."

Jaitley, who returned this morning, had said tax notices were sent to the FIIs following a decision taken by a tax authority in India.

"Since it's a view taken by a judicial authority, as per the moment the view is there. Some people have challenged it before a superior court... We are awaiting the court verdict," he had added.
On whether the total tax demand is USD 6.4 billion, Jaitley had said, "This was probably a figure being mentioned in the media. With regard to the number of assessment, the orders are few.
"What could be a possible consequence is a speculative figure. I don't want to go into that speculative figure. There is no intention of the government that we have set up a target to collect a particular figure. There is no such intention.

"The government's intentions are absolutely clear. We want to make India's tax regime absolutely non-adversarial."
The present government did not believe in retrospective taxation, he had said, adding "we have not enacted any such law".
Observing that people are comfortable not paying taxes, the Minister had said, "the policy of the government is (that) taxes payable are payable. Taxes not payable are not payable."
He had further said that investors from countries with which India had signed the Double Taxation Avoidance Agreement (DTAA) would get the treaty benefit.
"This is the problem of the past. If somebody is entitled for that (DTAA) protection, he will get that protection," Jaitley had said.