Steps to ease investor concern on permanent establishment:Govt

The government today said it is in discussions with stakeholders to ensure that offshore fund managers setting up permanent establishment in India do not face any adverse tax implications.
Speaking at an event here, Minister of State for Finance Jayant Sinha said the government is in the process of receiving stakeholder comments on the issue of Permanent Establishment.
Taking note of concerns expressed by the Private Equity and Venture Capital Association (IVCA), he said India has all necessary ingredients to become a global investment hub, and removal of Permanent Establishment norms is a huge step forward.
"We want to make sure people who are managing funds in Singapore, Dubai and London are here. We have all the necessary ingredients to become a global investment hub... As far as Permanent Establishment is concerned, that issue is out to rest," he said.

"You should feel very reassured as an investment manager based in India as your tax with respect to those funds is going to be zero," he added.
Finance Minister Arun Jaitley, while presenting the Budget for 2015-16, had said that to encourage offshore fund managers to relocate to India, the government will modify Permanent Establishment norms to ensure a mere presence in the country does not lead to "adverse tax" consequences.
In the Budget speech, Jaitley had said that the present taxation structure has an in-built incentive for fund managers to operate from offshore locations.
"To encourage such offshore fund managers to relocate to India, I propose to modify the Permanent Establishment (PE) norms to the effect that mere presence of a fund manager in India would not constitute PE of the offshore funds resulting in adverse tax consequences," he had said.