London-based ICI Global, a lobby group representing foreign investors, said that the clarification issued by the Finance Ministry over the minimum alternative tax (MAT) on the capital gains made by overseas funds in Indian stock markets did not ease its concerns over the issue.
On Wednesday, Minister of State for Finance Jayant Sinha clarified to investors, facing Rs.40,000 crore in tax demand, that those in jurisdictions (such as Mauritius and Singapore) that have tax treaties with India would not be subject to MAT taxes and also said that investors should approach courts for relief on the tax demand for the prior years.
“Recent remarks by officials of the Indian Ministry of Finance have not caused a change in ICI Global’s position. The United States does not have a capital gains provision in its treaty with India, and we continue to have the concerns expressed in our recent letters to Finance Minister Jaitley,” ICI Global spokesperson said in an email response.
ICI Global, a lobby group representing investors managing $19.2 billion across continents, had written two letters to Mr. Jaitley this month expressing concern over the demand and seeking an early solution to the issue.
