new delhi the government on tuesday accepted the recommendations of a panel that minimum alternate tax mat is not applicable to foreign institutional investors fiis a move which is expected to boost investor confidence and help sentiment in the financial markets finance minister arun jaitley told reporters that the government has accepted the recommendations of the a p shahled panel and will amend the income tax act most probably during the winter session of parliament the announcement came late in the evening against the backdrop of a slide in the stock market through the amendment the government proposes to clarify that mat provisions will not be applicable to fiisfpis not having a place of businesspermanent establishment in india for the period prior to april 1 2015 jaitley said he said pending such an amendment the central board of direct taxes cbdt will convey to field formations the decision of the government to accept the recommendation and hold off any further notices the committee has recommended that section 115jb of the income tax act may be amended to clarify the inapplicability of mat provisions to fiisfpis alternatively the panel has suggested that a circular may be issued clarifying the inapplicability of mat provisions to fiisfpis what applies post april 2015 that is no mat on capital gain on fiis will also apply on preapril 2015 jaitley said confidence among investors could be a consequence of this the fm said when asked whether the step will boost investor confidence experts lauded the government move saying it will help restore investor confidence this is an unprecedented move where the government has quickly stepped in to accept a taxpayer friendly recommendation especially considering the amount of potential tax demands which were being estimated the decision will also help to further the governments position that it discourages tax terrorism and welcomes foreign investment in india said rajesh h gandhi partner at deloitte haskins sells llp the acceptance of the shah committee report by the government will be viewed very positively by the foreign investor community and can help to boost sentiment and fii investment in the stock market fiis have been saved from the time and efforts in litigating this issue before courts and should be pleasantly surprised with the early resolution to the dispute he said gandhi said if the scope of the shah committee was widened to cover all foreign companies it would have helped to resolve the dispute for nonfiis as well the tax departments notice to fiis to pay mat on capital gains had triggered a row with angry fiis writing to the centre to have a rethink it had revived talk of tax terrorism by the government but the tax department had moved swiftly to contain the damage saying that mat on the capital gains made by overseas funds in indian stock markets would not be applicable if the money was routed through countries such as mauritius singapore and others with which india has signed double taxation avoidance agreements