FM Jaitley forms panel to sort out tax tiffs with foreign investors

London: Seeking to contain the adverse fallout of the MAT levy on foreign investors, finance minister Arun Jaitley today said the government would set up a high-level committee to sort out the taxations issues of the past and make the system predictable.

“Even though it is only the legacy issues (concerning taxation) that haunt us, we recognise that we must put a quick end to them.

“I am considering a high-level committee to explore what can be done to resolve the past, and move beyond it in a way that would provide real predictability and certainty to investors,” he wrote in an opinion piece in the Financial Times.

“This committee will be instructed to report back expeditiously so that early actions can be taken. We have fashioned tax policies for the 21st century. Our tax administration cannot afford to lag behind,” Jaitley said.

He said the disputes now attracting attention were legacy cases, arising from actions that the tax authorities and the judiciary took before the NDA government came to power.

Explaining the levy of MAT on foreign portfolio investors, Jaitley said the decision was taken not by the government but by quasi-judicial bodies, which were created - well before the present government came to power - to reassure investors that the tax system would be free of political interference.

Following a ruling by the AAR, the revenue department has sent notices to 68 foreign institutional investors for the payment of dues totalling Rs 602.83 crore towards minimum alternate tax (MAT).

PTI