Government considering clarificatory amendments to MAT rules: Jayant Sinha

New Delhi: The government is considering clarificatory amendments to the rules relating to Minimum Alternate Tax (MAT) for the benefit of foreign investors who have been battling tax demands worth Rs 40,000 crore. "Clarificatory amendments to MAT rules are under consideration of the government," said Minister of State for Finance, Jayant Sinha, on the sidelines of a conference on climate change held here on April 23. Sinha, along with top government officials, had held meeting with Foreign Institutional Investors (FIIs) on April 22, pressing for government's Rs 40,000 crore tax demand, saying they should approach courts to get relief on these matters.

However, the government also made it clear that such demands would not apply to the entities from DTAA countries such as Singapore and Mauritius. In case of investors from jurisdictions having Double Taxation Avoidance Agreements (DTAAs) with India, the treaty benefits would over-ride the tax demands. The Revenue Department has already sent notices to FIIs, demanding 20 per cent MAT on capital gains made by them till March 31, 2015.

For all other foreign investors except those falling under DTAA, the only remedy left is to challenge the levy of 20 per cent MAT on capital gains they made in past three years. Earlier speaking on 'Climate Change Finance In India', said Sinha the private sector has to be a prime mover to help innovate and finance clean energy to mitigate environmental challenges. "Even as we talk about what government is doing with respect to climate financing the reality is that the private sector is going to be the prime mover and prime agent in actually helping us to deal with the financing of the climate amelioration technologies," said Sinha.

He added that India really needs to look towards the private sector for large-scale solutions in this area. "We have to think, in India how we can come up with innovative solutions, where domestic venture capital, domestic private equity, some kind of innovative financing arrangement with public sector support (can) make it possible for us to enable a very valuable solution to take off," said Sinha.