NEW DELHI: India's tax department said in a statement it will hold off from issuing new demands for payments of a controversial minimum alternate tax (MAT), and will take no coercive action to pursue claims that have already been filed.
The statement from the Central Board of Direct Taxation comes after the imposition of retrospective MAT tax claims totalling just 6.02 billion rupees ($93.8 million) had sparked an outcry among foreign companies and investors.
Intended to ensure companies paid a minimum amount of tax in India, tax authorities have also been imposing MAT on foreign portfolio investors, including Aberdeen Asset Management since late last year.
Aberdeen has challenged its MAT claim at the High Court of Bombay.
The government said last week it will set up a panel to suggest ways to resolve the MAT dispute as well as some other tax issues.