investors challenge indian mat

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Investors challenge Indian MAT 04 May 2015 Meredith McBride in Hong Kong Several foreign portfolio investors have banded together to challenge India's minimum alternate tax (MAT) on capital gains in a case that will have wide-reaching implications for investors who face hefty tax bills between 2009 and 2015.

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Page 1: Investors challenge Indian MAT

Investors challenge Indian MAT

04 May 2015

Meredith McBride in Hong Kong

Several foreign portfolio investors have banded together to challenge India's minimum alternate tax(MAT) on capital gains in a case that will have wide-reaching implications for investors who facehefty tax bills between 2009 and 2015.

Page 2: Investors challenge Indian MAT

Aberdeen Asset Management filed its petition on May 2, while

Luxembourg-based BNP Paribas and National Westminster Bank in

London filed their petitions on April 29, with their hearing

set to begin on May 6. At least five investors that have filed

writ petitions in the Bombay High Court are primarily US or

UK-headquartered, and have received MAT demands in the past two

months from Indian tax authorities.

Law firm Khaitan Co has said that creating a

distinction between investors when applying MAT could be

unconstitutional. "It's creating a class in a

class of certain investors which is not permissible under the

constitution itself," said Bijal Ajinkya, a partner at Khaitan

Co.

"It's important to note that the reason MAT was

introduced was as an anti-abuse provision," added Ajinkya. "It

was not really introduced as a mechanism to impose an

alternative tax to an income tax for regular taxpaying

companies."...

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