MUMBAI: Foreign direct investors using Mauritius to bet on Indian stocks are already beginning to feel the end of a zero-tax regime. In the course of recent arguments before the authority of advance ruling (AAR), the counsels of the tax department have challenged the Mauritius structures of at last four foreign private equity and strategic investors. "It is legally not tenable to apply GAAR provisions pre- GAAR in effect and if applied could lead to loss of trust by foreign investors, " said Bijal Ajinkya, partner at law firm Khaitan & Co which is arguing on behalf of some of the offshore investors. These investors who had bought shares of unlisted companies some years ago, approached the AAR to reconfirm the tax benefit. "Thus, by challenging this position, the tax department will needlessly create uncertainty in the minds of the PE investors...

Source: Economic Times September 11, 2016 13:07 UTC