India has constituted a committee headed by a former high court chief justice A P Shah to suggest ways to resolve a dispute with foreign investors over previously untaxed gains that has rattled businesses.
The tax department has been demanding that foreign firms pay a minimum alternative tax on profits. They did not pay it earlier because it was widely believed that it only applied to domestic investors until a court ruled otherwise in 2012.
The government said while the tax would not apply from April 1, 2015 onwards, past incomes would face the levy, a stand challenged by foreign investors. Last week the finance ministry announced that a panel headed A P Shah would review the imposition of the minimum tax on transactions before April 1, 2015.
"The Committee will also examine all the related legal provisions, judicial/quasi judicial pronouncements and such other relevant aspects as it may consider appropriate," the finance ministry said in a statement.
Other members of the panel are Ashok Lahiri, a former chief economic adviser to the federal government, and Girish Ahuja, a chartered accountant. The tax department has imposed retrospective MAT tax claims totalling 6.02 billion rupees on companies. Some firms have challenged the levy as well as the 2012 court ruling.
