The AP Shah Committee, which was appointed by the government to go into question of levy of MAT on capital gains made by foreign institutional investors (FIIs), submitted its report to the Finance Minister Arun Jaitley on July 24.
The panel, a top source said, has recommended that there was no basis for levy of MAT on FIIs for period prior to April 1, 2015.
The Committee saw no legal basis for levy of 20 percent MAT on past capital gains, he said adding that the government is 'favourably' considering the recommendation.
While the issue had riled foreign portfolio investors, Finance Minister Arun Jaitley had in his Budget for 2015-16 exempted FIIs from the levy from April 1.
Also, the government had previously stated that FIIs can use tax treaties to reject demands on past capital gains. FIIs domiciled in countries that have signed double taxation avoidance treaties with India are exempt from these levies.
"The A P Shah committee has recommended giving MAT relief to FIIs for a period prior to April 1,2015 and the government is favourably considering it," the source said.
“There are some legal issues which had to be examined after the submission of the report. The Shah panel had met Finance Minister separately also after that," the source added.


Latest News  from Business News Desk