SC dismisses Castleton challenge as govt won't impose MAT

The Supreme Court on Wednesday dismissed a legal challenge filed by Mauritius-based Castleton Investment against the controversial minimum alternate tax (MAT) after the government said it would no longer impose it on foreign investors.

The dismissal comes after the government this month said it would revise its tax rules to exempt foreign companies from having to pay MAT. This had made it virtually certain the court would dismiss Castleton's legal challenge, which had questioned whether MAT could be imposed on foreign companies.

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The imposition of MAT on foreign institutional investors since late last year had sparked an outcry against the government, given the tax had previously never been imposed on overseas companies.