Writ petition on MAT issue

A writ petition on the levy of minimum alternate tax on Foreign Portfolio Investors (FPIs) will be keenly watched by others who have faced a similar issue. A lawyer said appeals are generally filed with the Commissioner of Income-tax (Appeals), the Dispute Resolution Panel or the Income Tax Appellate Tribunal. However, they can move the High Court if they feel the provision under which they are taxed is itself invalid. “A High Court, in its extraordinary jurisdiction, can consider such a challenge, however, given that High Courts will soon be on vacation, the FIIs will have to move and act quickly,” said Ranjeet Mahtani, Associate Partner at legal firm Economic Laws Practice. Five FPIs are reportedly looking to file a writ petition in the Bombay high court on the matter. A spokesperson for Khaitan & Co, the law firm said to be handling the petition, did not respond to a request for comment. The government has sought to impose MAT on FPIs. The provision was originally introduced to tax domestic companies which make large profits but pay little in taxes on account of various exemptions. Notices have been sent to at least 68 institutions with demands for Rs 602.8 crore. More are said to be in the works.