Tax roll-back on FPI buzz pushes Sensex, Nifty; leading FII representatives discuss issue with FM Sitharaman

Buzz around rumoured roll-back or tweak in the controversial tax on the Foreign Porfolio Investors (FPIs) pushed Sensex and Nifty to gain for the second straight day on Friday. Markets bled heavily owing to the foreign fund outflow ever since the tax on FPIs was announced in the Union Budget 2019-20. The Sensex closed 254.55 points higher at 37,581.91. It closed on Thursday at 37,327.36. The Nifty closed at 11,109.65, higher at 77.20.

Leading FPIs including J.P. Morgan, HSBC, Barclays, Standard Chartered, Deutsche Bank and prominent Indian company representatives met Finance Minister Nirmala Sitharaman on Friday to discuss the controversial tax. The delegation Vipul Mehta of Nomura, Vijay Karnani of Goldman Sachs, Pallav Kumar of Deutsche Bank, Amit Padhye of Standard Chartered, said an IANS report. 

Representatives from JP Morgan, HSBC, Blackrock, CLSA and Barclay were also were among the 18 foreign portfolio investors (FPIs) who met the Finance Minister to raise issues such as the recently-introduced tax surcharge and seek either full rollback or suitable tweaking to keep them out of the higher tax net. 

Among the 20 Indian investors at the meeting were, Uday Kotak of Kotak Mahindra Bank, Chief Executive NSE Vikram Limaye, Chief Executive BSE Ashish Chauhan and representatives of Tata Capital, Edelweiss group, Aditya Birla Sunlife, the report said.

Earlier on Friday, Finance Minister Nirmala Sitharaman attended the CII National Council Session. She said, "At no point and on no score, do we want to make it difficult for the industry," adding, "it is our intent to reduce tax on corporates," while emphasising that there was "no second thought" on this matter. 

Sitharaman talked about taxation, infrastructure, RBI-government relations, delayed payments and corporate social responsibility (CSR), and said that the government would consider a uniform 25 per cent tax rate for all categories of corporates after there was comfort that tax revenues were on the upward trend.

Sitharaman also touched upon two other elements relating to taxation: simplification and harassment. 

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She also informed the CII members present that she will be travelling around the country, including to Tier 2 cities, to first-hand hear and understand the tax harassment issues faced by corporates. 

(IANS Inputs)