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This Mumbai Tribunal ruling lays down a significant principle that minimum alternate tax provisions are not applicable to foreign companies even if they have permanent establishment in India. This is despite the fact that MAT provisions specifically exclude only those foreign companies from tax treaty countries which do not have PE in India.
This ruling supports that such a specific exclusion cannot be interpreted in reverse gear to infer that MAT provisions get automatically triggered if there is a PE in India.
For this principle, the Mumbai Tribunal relied upon the legislative intent of MAT provisions, the exclusion introduced for foreign companies and the fact that Indian PE accounts of foreign companies are not required to be placed before shareholders in an annual general meeting.
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