The Hindu Business Line : Assocham seeks abolition of MAT

NEW DELHI: The Associated Chambers of Commerce and Industry of India (Assocham) has sought elimination of Minimum Alternative Tax (MAT) terming it as one of the "greatest obstacles in the way of growth of companies and also attraction of foreign capital".

In a representation submitted to the Finance Ministry, the Chamber President, Mr Mahendra K. Sanghi, has strongly advocated discontinuation of MAT, arguing that it has added several problems in assessment of companies and generated inefficiencies, distortions and inadequacies in the system.

He further pointed out that MAT is payable by companies even on long-term capital gains, though the same might not be taxable because of indexation or investment in approved securities in accordance with the provisions of sections 54EC/54ED of the Act. Therefore, the Chamber has sought that the imposition of MAT should be excluded on long-term capital gains while computing is done under book profits.

It has further pointed out that the Government has not been taking into account the tax rate available to companies under Section 115JAA, while calculating interest payable under section 234A, 234B and 234C of the Act.

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