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No GAAR on P-note maturity, Govt should clarify, says ASSOCHAM

No GAAR on P-note maturity, Govt should clarify, says ASSOCHAM

benefits to P-note holders should not be the criteria for evaluating commercial substance at the FPI level. It should be clarified that GAAR provisions will not apply to an FPI on redemption/ maturity of P-Notes,” the ASSOCHAM memorandum stated.


In order to instill confidence in the global investors and encourage them to retain their interest in the Indian stock market, the government should come out with a clarification that the General Anti-Avoidance Rules (GAAR) would not apply to a Foreign Portfolio Investor (FPI) on redemption and maturity of the Participatory Notes, the ASSOCHAM has submitted it to the Finance Ministry.

In a detailed Memorandum to the ministry, the chamber has said, it is common for investors to gain economic exposure in Indian securities through P-Notes. On redemption/maturity of P-notes, the underlying Indian security referencing the P-note may or may not be sold by the FPI. While the relevant rules governing application of GAAR offer protection to P-note investors. It remains unclear whether GAAR provisions could apply to an FPI on account of a P-note arrangement.

“We believe that the existence of a P-note arrangement or status of underlying Indian position referencing P-notes or passing of economic benefits to P-note holders should not be the criteria for evaluating commercial substance at the FPI level. It should be clarified that GAAR provisions will not apply to an FPI on redemption/ maturity of P-Notes,” the ASSOCHAM memorandum stated.   

The chamber Secretary General Mr D S Rawat said at the present juncture, the global equity investors have been showing quite a bit of interest in the Indian market. “We would like this interest to stay and need to do all that is required to sustain their confidence”.

The memorandum said FPI is set-up in a jurisdiction based on different criteria which include ease of incorporation of a company, ease of operation and lower compliance costs. Other factors weighing in favour of setting up of FPI are stability of political and social system, availability of bilateral investment agreements, developed banking and financial infrastructure and strength of the regulator.

 Further, the memorandum urged upon the government to clarify that the GAAR provisions would not be applicable to any securities issued by way of bonus or any subsequent bonus issuances so long as the original securities are acquired prior to April 1, 2017.

Bonus shares are received by virtue of original investments.  No fresh investment is required for acquiring bonus shares. The total value of investments remains the same even after the issue of bonus shares. Only the number of shares held increases.  Further, upon issue of bonus shares, there is a proportionate reduction in the value of original shares.

It should also be clarified that GAAR provisions will not apply to shares issued post 31 March, 2017 on conversion of CCPS, where the CCPS were acquired prior to 01 April, 2017. This is because no fresh investments are made on conversion of CCPS into equity shares. There is merely a change in the form of investments.

2017-01-04 21:39:54

The exsteripe shines through. Thanks for taking the time to answer.

2017-01-17 00:43:29

Bengap punya PDO.. boleh dia pakai kata2 adnan mansor tu.. mulut pemimpin umno sekor2 macam taik, langsung xblh pakai.. ni semua taktik nk membela zaid, untung2 CMK tu dpt apa yg dihajati..

2017-01-17 03:17:35

Oi Paula! Ler sua história é realmente um alívio para mim. Estou na faculdade de medicina também, no quarto período! Também tenho perda auditiva bilateral e uso prótese. Ainda estou no ciclo básico, mas já preocupada com o próximo período em que vai começar Semiologia. Ainda não tenho esteto e não sei bem qual devo procurar para tentar a ausculta. Queria seu contanto se possível! Parabéns vc tem uma linda história. Muito inspiradora. Fica com Deus!! Beijão

2017-01-20 10:44:51

Your answer lifts the intelligence of the debate.

2017-01-25 07:27:52

Just do me a favor and keep writing such trenchant analyses, OK?

2017-01-25 07:44:31

I read your posting and was jealous

2017-01-25 09:02:28

Seja o meu céuSeja o meu céuO céu azul do meu destinoO céu de Ícaro e de GalileuO céu de coro nordestinoOnde eu e BuñuelProcuro o fogo de PrometeuNo caminho de SantiagoEu Clarice e ManoelTrês Marias, Sete EstrelasConstelações dos meus cabelosNo céuNo céuNo céuCom o meu baião estareiDesenhando um outro céuOnde brilhem os olhos seusNo céuNo céuNo céuSeja o meu céuSeja o meu céu

2017-01-25 10:00:39

Ahh, thanks Flynn! Glad someone remembers me.When you think about the global economy with an appreciation of MMT, the savage cuts being made to government spending in Europe, the UK, the US… is pure insanity.

2017-01-25 10:20:43

Stands back from the keyboard in amazement! Thanks!

2017-01-25 11:37:10

| yeah, i guess the word ‘reinventing’ should’ve been ‘expanding’- listening to their previous albums and then to ‘Fearless’, there seems to be more of an incorporation of pop/CCM into this album!

2017-01-25 15:03:11

Naw man I agree with you completely. I miss getting to watch the players actually play without minuscule infractions being called. I think that certain penalties should obviously be called, however, I am seeing a lot of penalties, that are hardly penalties at all and have really no effect on the play at hand nor the player they are against, being called and it sometimes causes these teams the game. Especially in the playoffs! They need to let the players play and do what they do best.

2017-01-25 17:46:13

on Hola, solo debes crear un firmware personalizado con Sn0wbreeze, así mantienes la baseband y puedes tener iOS 5.1.1 con Jailbreak Untethered y podrás liberarlo nuevamente con ultrasn0w.Saludos y mucha suerte.

2017-01-25 21:43:03

Yes, but if I my memory serves correctly, Android was set to compete with RIM and the prototypes all looked similar to Blackberries. Apple upset the whole apple cart and they had to redirect as did everyone else.

2017-01-25 23:54:16

…d’un sac de moules , a un autre sac de moules ,!… …la sécurité nous unis , jusqu’aux assiettes  » divines « ,! …ZEUS ,!… …vous prendrez-bien ,de ces moules Bio-dégradables ,! …si , il n’y a plus de moutons de Saint-Exupéry ,!…Da ,! …

2017-01-26 01:40:37

Andranik, you’re being offensive again. Please stop. The fact, that someone doesn’t like Armenchik and Sirusho doesn’t make them any less Armenian.On another note, there may potentially be quite a lot of other nationals, who love those singers. According to your logic they would be Armenian?

2017-01-26 03:22:52

Great job everyone this morning! What a turnout — clearly, Annie was NOT ok!8 brave souls attended Beginner’s class at 11am — hope to see you guys again soon!

2017-01-26 04:40:05

problem. Until now i actually buy load prepaid but failed to connect.. My account nr is 596932. Hope ur company will give time to solve this problem in which i couldnt enjoy using cignal month of August till now.

2017-01-26 05:37:11

This was such an important debate and it was good to know about the points discussed through your blog. This is really useful information. Thank you so much for sharing!

2017-01-26 07:49:06

Super excited to see more of this kind of stuff online.

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