AAR: MAT, TP Applicable in Treaty Cases

This alert by Khaitan & Co. covers the latest Advance Ruling delivered by the Authority for Advance Rulings, where it has granted the benefit of capital gains tax exemption in India under India-Mauritius Tax Treaty but has held that the Mauritius company is subject to payment of Minimum Alternate Tax (MAT) as per the Income Tax Act, 1961 (IT Act). The AAR has held that provisions relating to transfer pricing and MAT as per the IT Act are applicable to foreign companies, irrespective of whether the gains are taxable in India and whether or not such companies have a ‘permanent establishment’ in India. 

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